So long story short, my roof suffered some wind damage and I got a quote to get my roof replaced and my insurance is going to cover it. The part I am struggling with is paying my deductible and some other roof related expenses that insurance does not cover. I will owe roughly 3500$ out of pocket and cannot afford to pay it in cash. Should I look at getting a personal loan or should I put it on a credit card? (it would be roughly 70% of my credit limit) Or are there any other options I should look into. Also considering selling the house for other reasons and using the gain from that to pay off my loan/credit card.
How should I pay my deductible
byu/Next-Daikon4415 inpersonalfinance
Posted by Next-Daikon4415
3 Comments
CC if you always pay in full. This gives you 3-8 weeks of breathing room. Then get a HELOC, HEL, or personal loan to pay it off.
What loan terms are you considering? What is the interest rate on the credit card? How long will it take you to pay off the balance? Or is your plan to sell the house regardless, so you are hoping to be able to pay off the debt with the home sale proceeds?
Hindsight is 20/20, but this is why it’s important to choose deductibles that you can afford to pay out of pocket on.
(1) Talk to the roofer about financing. They may have a 3 or 6 month financing option with fairly low interest, assuming you just need a bit of time.
(2) If you cannot get that, then if you have good credit, can you get a 0% interest card and pay it off within that promotional period?
(3) If that isn’t an option, a HELOC is probably the next best option.
Overall, it sounds like you are not in great financial shape, and need to make some changes. It sounds like you are carrying credit card debt and maybe another loan, have effectively 0 cash on hand for emergencies, and very low available credit. I would start looking to increase income and cut expenses until the credit cards were paid off and I had a $5,000 emergency fund.