DISASTER KIT: Best Ways to Raise Cash

If your emergency fund is tapped out, you can probably borrow from yourself. Here are the top contenders

- SANDRA BLOCK

THE $2 TRILLION CORONAVIRUS stimulus package is providing a $1,200 check for millions of Americans. Parents are getting an additional $500 for each child age 16 or younger. The stimulus package also significantly expands unemployment benefits to include part-time workers, the self-employed, and people who ordinarily wouldn’t qualify.

Although both of those initiatives are supplying much-needed cash for many families, the funds may fall short if you’re out of work or furloughed for a prolonged period of time or have big health care expenses. If you’re cash-strapped, you may be tempted to run up credit card debt—but before you do, explore these sources of emergency cash. They could tide you over until the crisis has passed.

A home equity line of credit. If the value of your home has been heading steadily higher, you may be able to take out a home equity line of credit to tap your equity. With a HELOC, you can borrow up to your limit whenever you need the money. Interest rates are low— averaging about 5%—and you can make interest-only payments until the initial withdrawal period ends, typically after 10 years.

When you apply for a HELOC, lenders will look at your credit score, the amount of equity you have in your home, and your income. For that reason, if you’re still working, it’s a good idea to apply for a HELOC even if you’re not sure you’ll need it. Once you’re unemployed, it’s difficult to qualify for a loan, says Danielle Harrison, a certified financial planner in Columbia, Mo.