We give of ourselves, our time, our talents, and our money as baby boomers over 60 struggle to care for so many people in our lives. Many people over 60 are giving to the point of forgetting to look out for themselves first, whether it’s buying gifts for grandchildren, supporting a husband who may have lost a job, or even supporting grown children who are having difficulty finding work or affording a home.
If you’re having financial difficulties, there are a number of companies that would be happy to speak with you. Unfortunately, the financial services business has some unethical actors, and not all loans and financial products are beneficial to you as a consumer.
If you need money, whether it’s for an emergency, a one-time purchase, or merely to get by while waiting for a new job, the sale of a property, or another source of income, there are a few sorts of loans that women over 60 should avoid. If you need to borrow money, there are a few sorts of dangerous loans to avoid:
Getting a Payday Loan
Payday loans work by giving you a portion of your next salary in exchange for a charge. The problem is that if you don’t pay back the loan, the costs can quickly escalate. Some states in the United States have enacted strict regulations on payday loans, and payday loan offices are frequently located in less affluent areas of town, indicating that many of these businesses are specifically targeting a less educated, less wealthy demographic that is often financially vulnerable. Payday loans should be avoided.
Car Title Loans
This is a type of personal loan in which you take out a small loan with a 30-day repayment period and put your car title up as collateral. Although it may appear to be a good deal, automobile title loans are problematic. The interest rate is usually very high, and if you don’t pay back the loan, you risk losing your automobile – all for a relatively tiny amount of money that is generally much less than the car’s value.
Car title loans are another sort of loan for which many states and municipalities in the United States have implemented restrictions or even made it illegal for car title lenders to operate in their jurisdictions. (Car title loans are not the same as “car loans,” which are used to purchase a vehicle.) Only cars for which the owner already has the title and owns “free and clear” are eligible for title loans.
Loans from Tax Refunds
Some companies in the United States provide a tax refund loan, which allows you to borrow against the amount of your projected tax refund. A tax return loan has the disadvantage of charging a high rate of interest as well as additional upfront costs. Rather of depending on a tax refund loan, you’re usually better off working with a skilled CPA to reduce your tax burden.
Cosigning on a Loan
When you don’t have good enough credit to get accepted on your own, you ask a friend or relative to “co-sign” the loan and share the responsibility for repayment. Co-signing on a loan is one of the riskiest financial moves you can make, not only because of the money involved, but also because of the risk to your relationship.
If you don’t pay back the loan, your co-signer is also responsible, so collections agencies can pursue your friend or relative in the same way they can you. Before co-signing or requesting someone else to co-sign on a loan, think twice.
Prioritize Your Own Health
While it is impossible to plan for every eventuality, and actual crises sometimes occur, there are a few things that every woman over the age of 60 should do to strengthen her financial resilience.
To begin, ensure that you have several months’ worth of emergency funds set aside for a rainy day.
Second, cut your everyday expenses to avoid being thrown off path by life’s unavoidable hiccups.
Third, pay down your debt and keep a decent credit score so you don’t have to rely on dangerous loans.
Finally, and most importantly, look after yourself before assisting your loved ones. If you can’t afford to support others, be honest about your financial circumstances. “Put your own oxygen mask on first, before aiding others,” as they say on planes.
Do you know anyone who has signed a financial contract they later regretted? What happened, and what did they take away from it? Please leave your thoughts in the comment section.
