How to Pay for Winter Storm Damage If You Dont Have the Cash Right Now
Written By: Claire Tak
Tuesday, February 05, 2019
4 steps to assess your homersquo;s damage
Before you worry about the cost, itrsquo;s always a good idea to inspect your home carefully to gauge the extent of the repairs needed. Get your smartphone out and document any damage, as that can help speed up your insurance claim if you file one.
1. Walk around the exterior of your house
Scan the perimeter of your home. As yoursquo;re scanning, look for things like missing shingles or bricks from your chimney that may have fallen to the ground from the storm.
2. Check the roof
Walk to your backyard and front yard to get a view of the roof.
3. Check the attic
If you have an attic, see if there are any water stains on the ceiling or walls.
4. Call a professional
Get the damage inspected by a professional so you can accurately figure out how much it will cost.
This person may also be able to answer questions around repairs that may be covered by homeowners insurance or home warranty policy if you have one. Certain causes of storm damage such as wind, hail and lightning could be covered by homeowners insurance. Call your insurance or warranty company to see if yoursquo;re covered.
Options to help cover the cost of repairs
If yoursquo;re quoted a price thatrsquo;s well out of your means, what can you do? Some options include:
1. Borrow money from The Bank of Your Parents, if they are even in a position to help you out. But letrsquo;s be honest, mixing money and family could be a disaster and added stress on top of the stress you already feel from the damage to your home. Next optionhellip;
2. Turn to your credit cards mdash; but keep in mind yoursquo;ll have to deal with the interest rate. The average new credit card APR is 19 percent. If you used 10,000 to fix your roof with that 19 percent APR, and only made minimum payments to pay it off in 5 years, you could end up paying over 5,000 in interest Next option...
3. Apply for a personal loan, which often has lower interest rates than a credit card. Some online lending platforms have interest rates as low as 7 percent. That same 10,000 roof repair with a 5 year loan may only cost you about 1,880 in interest, rather than 5,000. Thatrsquo;s a huge saving
Details of personal loans
The word ldquo;loanrdquo; can sound scary, but people use personal loans to pay for medical bills, purchase a car, pay off taxes, pay weddings, go on vacations and even cover the cost of Christmas presents.
Personal loans must typically be repaid within one to five years. Keep in mind the rate and loan amount may be contingent on your credit and overall financial standing.
What kind of credit do you need for a personal loan?
If you have good credit, personal loans can work to your benefit because they are typically unsecured. This means the loan approval is based on creditworthiness, rather than collateral mdash; so you wonrsquo;t need to put your home or car on the line in order to get the loan.
However, times are changing and some lending platforms are no longer looking at credit as the only factor. They may consider your education, area of study, and job history to get a better picture of your risk factor.
Even if your home doesnrsquo;t have significant damages, have a plan for how yoursquo;ll cover expenses in the event of an emergency. If you donrsquo;t have the cash on hand, a personal loan may be your best bet. In the meantime, set up an emergency fund and make it a priority to put away extra money just in case.
Claire Tak writes for Upstart about all things personal finance. She has a background in finance technology, and her work has appeared in major publications such as Forbes, Bloomberg and FOX News. Claire is based in Oakland, California and enjoys traveling in her spare time.
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