As the destructive flood waters slowly recede and power is gradually restored along the East Coast following Superstorm Sandy last week, thousands of victims are currently being offered a financial helping hand.
The massive hurricane, which claimed the lives of at least 110 people and created massive destruction across nine states, has left nearly 100,000 residents in New York and New Jersey without homes. This makes them eligible for housing assistance, according to the Federal Emergency Management Agency (FEMA). Combined with Connecticut, more than 277,000 people have registered for general assistance, the agency said.
In addition to government assistance, numerous U.S. banks are offering customers an opportunity to access money in this time of need.
Many banks offer to extend credit and low-interest loans during crisis
Several U.S. financial institutions are attempting to help people in need of financial assistance during the aftermath. Citibank, Bank of America, Chase and Wells Fargo, for example, have been reaching out to storm victims through emails and their websites with emergency loan offers and credit limit increases.
Some banks are said to have loosened lending standards a bit in an effort to reach out to those people facing dire circumstances. Citibank customers, even those who may not have been approved previously for a credit increase, for instance, may request their account history be re-evaluated. If approved, the new credit limit would become permanent.
Bank of America is offering a similar increase in credit, but the institution will determine each case on an individual basis, taking into consideration credit worthiness and extent of storm damage.
Chase has offered extended credit lines to customers who may have not otherwise qualified with the stipulation that the limit would eventually revert to the previous level once recovered from storm.
Wells Fargo has offered personal loans to customers hard hit by the storm in addition to credit limit increases. Many people living in FEMA-designated areas such as New York, New Jersey and Connecticut will have an opportunity to borrow $3,000 to $25,000 to help aid recovery. While unsecured loan interest rates typically vary and often carry a rate commensurate with credit worthiness, these special loans will be offered at the bank’s lowest rate of 6.75 percent. Customers must meet standard credit requirements.
Storm victims urged to avoid high interest rates
While a credit increase can be a life saver in the event of a crisis, Odysseas Papadimitriou, CEO of the credit card site CardHub.com, urged storm victims to ensure they investigate all their financial options and secure a low interest rate when borrowing money. Since high interest rates can significantly lengthen payoff time, it may be more practical to apply for a new credit card with a promotional offer, such as 0 percent interest rate.
While tempting to many because of their convenience, payday loans typically carry an enormous interest rate (some exceeding 396 percent) which could result in repayment challenges – especially during a disaster recovery.
Victims urged to seek multiple recovery options
Papadimitriou also recommends storm victims confirm with their insurance companies to determine how much damage will be covered prior to taking out loans or opening new lines of credit. National and state disaster relief agencies should also be able to offer assistance.
FEMA will generally help with rental payments for temporary housing when the victim cannot stay in the house. People can also apply for grants to assist with home repairs and to replace destroyed household goods. Additional disaster help, such as medical, dental, funeral or transportation services may also be available to those in serious need.
The Small Business Administration also offers disaster loans up to $200,000 with very low interest rates to homeowners in need of replacement or repair as the result of the storm. Homeowners or renters who need to repair or replace personal property may borrow up to $40,000.
The American Red Cross also offers free assistance, such as shelter, meals and transportation to storm victims.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
- Hays, T. & Long, C. (2012, November 7). Nor'easter Storm Approaches Hurricane Sandy-Battered New York, New Jersey. Huffington Post. Retrieved from http://www.huffingtonpost.com/2012/11/07/noreaster-storm-approaches_n_2087606.html
- Ellis, B. (2012, November 6). Banks offer loans, credit limit hikes to Sandy victims. CNN Money. Retrieved from http://money.cnn.com/2012/11/02/pf/sandy-banking/index.html?iid=HP_LN
- Shabazz, B. (2012, November 2). Short term loans are offered to victims of Hurricane Sandy. Examiner.com. Retrieved from http://www.examiner.com/article/short-term-loans-are-offered-to-victims-of-hurricane-sandy
- Serna, J. (2012, November 3). Hurricane Sandy death toll climbs above 110, N.Y. hardest hit. Los Angeles Times. Retrieved from http://www.latimes.com/news/nation/nationnow/la-na-nn-hurricane-sandy-deaths-climb-20121103,0,6945430.story