Every financial guru tells you to have an emergency fund, and a vehicle registration loan can help you get there. Emergency funds are a crucial financial vehicle that everyone needs—even before paying off other debts. Why? Because when you need a doctor, a car repair, or a hotel when your house floods, you can’t afford to not have the money to meet that need.

When you need money for emergencies, you can’t simply hope that a money miracle will happen. What you can do is have an emergency fund, and a vehicle registration loan can help you get it.  Sure, you have debts, and the smart financial move is to pay them off. But if you listen to even the most conservative financial advisor, they will tell you to put aside emergency funds before you do anything else. Why? Because having your house or car paid off won’t help you if you’re stranded during a trip and need money for a hotel and food.

So how can a vehicle registration loan help you? If you are trying to build an emergency fund, you need to be smart about your money. You don’t necessarily have a lot of extra funds that you can or should use for things you don’t really need.  You can use a vehicle registration or title loan to help dig yourself out of a hole so you can start on saving those emergency funds and get to your debt payoff more quickly.

The best thing you can do, financially, is get out of debt. Once you have an emergency fund in place, you should start with the debt you have that has the highest interest rate and pay that one off first. Then go to the next one.  This is often called a debt waterfall.

But always start with creating that emergency fund. No matter how much debt you have paid off, if you need cash for something now—like a new tire when the old one blows—having very little debt doesn’t help you in a pinch,  yet  having cash on hand does.

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