There are many unexpected events that can happen in our lives anytime. That’s the reason why a good financial foundation always include a healthy amount of emergency fund stock away.
But in times of financial emergencies, we don’t know how much we might really need and no matter how much emergency fund (Rainy Day fund) we were able to save, it may not really fully cover an emergency need.
There are a lot of obvious places you can get loans from, like personal loans from banks, your friends or your relatives. But you might want to avoid those places because of the following reasons:
Banks – too hard to get a loan and gives a very high interest for personal loans.
Friends and relatives – relationships could be damaged when you choose this route.
So before your emergency fund runs out and before you run to your bank, family or friends, here are some unexpected places you never knew before that could save your life.
1. Employees Emergency Fund
Some companies set aside an emergency loan program for their employees in case of these unavoidable circumstances. Payments are usually salary deducted (they may add interest too), depending upon their rules.
Try to inquire your HR department before checking others.
2. Social Security System (SSS)
Do you know that SSS has a salary loan program for its members?
- Salary Loan
The maximum salary loan you can loan is P32,000 if you are contributing the maximum contribution each month. So a member may get a net of P31,700. Equivalent to 2 month’s salary. Minus P300.00 as a service charge. The interest is minimal at 10% per annum at an initial balance with diminishing interest.
See how this works: Dissecting Social Security System (SSS) It Pays to Know Your Rights and Benefits
Do you know that Pag-IBIG don’t just give housing loan? You can also get other types of loan from your Pag-ibig fund in case of an emergency.
There are 2 other types of loans you can have with your Pag-IBIG besides a housing loan:
- Multi-purpose Loan
You can borrow up to 80% of your existing contribution. You can use it in any ways you want like for tuition fee, or any other types of emergencies. The interest rate is 10.5% per annum, payable for 2 years, with a grace period of 3 months.
- Calamity Loan
If you are a victim of a calamity like typhoon and if your Local Government Unit (LGU) declared that your area is in a state of calamity then this will become available for all those who want to avail. The interest rate here is much lower than the multipurpose loan which is only 5.95% per year payable for 2 years. Calamity Loan can be availed within a period of 90 days from the declaration of a state of calamity.
4. Credit Card Cash Advance
Most credit cards have a cash advance feature where you can borrow money. And instead of using it to buy things on credit, you get a cash loan on an interest, of course!
Just a warning: Credit card usually gives the highest interest.
If you are part of any Cooperatives “kooperatiba”, some grant their members loan benefits. Try inquiring if you can get loans there. Again, there are interests, depending on their rules.
In case of a critical or catastrophic disease, PhilHealth has a Z benefits program for its members.
It grants a fixed large sum of money for extreme diseases like cancer and cardiovascular diseases and operations, etc.
Note: Unlike others in this list, this is not a loan but a benefit for all eligible PhilHealth members.
For a sample of these cases and how much PhilHealth grants, see this post.
7. Permanent life insurance policies
There are 2 things you can do to your existing permanent life insurance policy:
Note: Not for term insurance.
Do you know that you can loan to the cash values of your insurance policies depending on the insurance company’s bylaws? It is usually up to 85% of the cash value at a minimal interest rate (8%/year) which is way below the interest rates in banks which is usually 13-20%/year. And you have the option when you want to pay, as long as the policy is still enforced, and you don’t mind the interest. In simpler terms, “pay when able”.
Depending on what type of permanent insurance policy you have, you can withdraw the dividends on your traditional insurance policies or fund values of your variable life policies.
That’s it. If you know some other places you can get from that I don’t know, just share and comment below.
For your financial health,
Are you financially sick and needs some cure? Contact your Finance MD here. Click here.
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