line of credit Archives - Financial Independence Hub

By Tanvi Kaushik

Special to the Financial Independence Hub

When you live a salaried life, money is always on your mind. No matter how meticulously you plan your monthly expenses, unexpected expenses may crop up anytime. It could be repairs for your home, a medical expense, a veterinary bill, or a loss in business. In such cases, it is wise to maintain an emergency fund that you can dip into to meet the unexpected expense. But sometimes, savings may not be enough to meet the emergency expenses.

Thankfully, with advanced fintech, it is possible to avail of a loan: big and small. Not only that, you can get the funds quickly in your account.

If you ever face a financial crunch, here are some options you can explore to get funds in a short time.

Ways to pay for Unexpected Expenses

1.) Credit Card

Financial experts usually don’t recommend using a credit card to fund a sizeable emergency expense. A significant expenditure can land you in substantial credit card debt with rising interest rates. However, if your expense is something you can pay back within the interest-free period or your emergency fund is falling short by a small amount, using your credit card can help.

It is also wise to scan the market for other options in such cases. You could explore new financial instruments such as a virtual credit card. Virtual credit cards are digital cards available online. The usage is similar to a conventional credit card with a card number, CVV, and validity. But it works like a flexible personal loan wherein a predetermined amount is transferred to your account, and you pay interest only on the amount you spend using your card. You may use your virtual credit card for limited purposes.

2.) Personal Loan

A personal loan is a valuable financial instrument to tide you over an unexpected financial crunch. Personal loans usually have high interest rates, but depending on your credit score, repayment records, and the loan amount you may find personal loans affordable compared to other financial instruments. Flexible personal loans with shorter repayment cycles allow you to take a loan but only pay for the amount that you use. Flexi personal loans are also available for amounts as small as one thousand, and with affordable interest rates. Salaried people can opt for other kinds of personal loans that enable you to repay the amount in convenient monthly instalments.

3.) Line of Credit

A line of credit enables you to borrow money with a predetermined credit limit. In times of emergency, lines of credit can be valuable financial instruments. A line of credit allows you to borrow as much as needed within a predetermined credit limit. Even if you are unsure of the total amount, you need to meet your emergency expense. The exact repayment plan you get for your line of credit depends on your lender. You may pay back in instalments, or your lender may ask for a lump sum repayment.

4.) Salary Advance

Employers usually support their employees by giving them the option of a salary advance. A salary advance implies that your employer gives you an amount you can repay with small deductions in your future pay-cheques. Usually, payroll advance is convenient and a quick way to get some funds in an emergency. Every company has its own salary advance policy and a specific period for repaying the advance amount. Talk to your finance department to understand the policy and interest rates better. Continue Reading…

By Helen Chevreau, Hub Staff

I think it’s safe to say that by our mid-twenties, most of us millennials have received ample financial advice — be it desired or unsolicited. Oftentimes much of it boils down to the same few nuggets of wisdom. We hear those same phrases over and over throughout our childhood and young adulthood so often that sometimes, the value behind them begins to lose its potency.

I know that personally, the phrase “don’t live beyond your means” was a household mantra. If I had a dollar for every time I’d heard that from my dad growing up, I wouldn’t need to be worried about following it! (Editor’s note: see Helen’s bio below).

This week, we’re lucky enough to be working with TD Canada Trust to get to the bottom of what these oft-heard universal personal finance phrases really mean. According to a recent TD survey, the three most received pieces of advice from parents and guardians to millennials have been to live within their means, to save a percentage of each paycheque, and to save for a rainy day.

These are all wonderful pieces of advice, and every millennial should be following them to the best of their ability. However, sometimes these overgeneralized statements ( especially something like “saving for a rainy day”) aren’t helpful to a millennial who has yet to encounter a “rainy day,” and so doesn’t know what to expect from it.

This is where Shirley Malloy, TD’s associate vice president of Everyday Banking comes in. She is here to share a few ‘Moneyhacks’ that will turn these financial ‘truths’ into measurable goals that any millennial (or other financially-inclined individual) can implement.

Nugget #1: Don’t live beyond your means

Actionable takeaway: Don’t mistake credit for cash.