Skip to Main Content

Second stimulus check: With no relief in sight, here are 6 places to turn for financial help

Father stressed about bills
Pekic/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

The long-awaited second round of stimulus is still on the table, but the timeline for when Americans would actually see a new round of aid is still being held up in Congress.

Previously, it was the presidential and congressional elections slowing down the decision, but with the results slowly coming in, it sounds like leaders are starting to shift their focus back to stimulus options. Senate Majority Leader Mitch McConnell says he is pushing to have a new coronavirus aid bill settled by the end of the year.

Nonetheless, it’s still unclear when these checks would actually hit Americans’ wallets. And while an earlier Bankrate survey revealed that the $1,200 check wouldn’t keep struggling Americans going for a month, the stimulus would certainly help cover day-to-day essentials and other timely payments.

If you’ve been financially affected by the pandemic, here are six places you can turn to for relief.

1. Reach out to your creditors and lenders

If you are struggling to make payments on your credit cards or loans, give your creditors and lenders a call to see if they’ll offer any assistance. For example, you might be able to receive forbearance, which could help you get up to speed on other important payments.

Currently, mortgage borrowers can get forbearance up to a year under the CARES Act and some banks and credit issuers are even offering assistance to their customers who are struggling — you just have to ask.

2. Look into local community assistance programs

Sometimes help is around the corner, but you just have to do a bit of searching beforehand to find it.

A good resource for getting access to help is, which connects people to local assistance programs. For example, 211 can help you find food, pay housing bills or other essential services. They can even help you secure free or more affordable internet.

You can also give them a call at 211 and you’ll be connected to someone who will help you find assistance nearby. United Way, for example, is one of the many partners that 211 may connect you with. The Salvation Army is another organization that may be able to help you out whether you’re in need of housing or food assistance.

3. Use your emergency savings

Emergency funds are there for situations exactly like this — so consider using them to help you get by during tough times. While it may sting to watch your balance go down, it’s a better alternative to piling up debt.

When deciding what to use your emergency funds towards, ask yourself this: Is the purchase or payment in question actually necessary for survival? This can help you limit your emergency fund spending so that it’s only going toward the true necessities.

4. Consider a coronavirus hardship loan

Coronavirus hardship loans, a type of personal loan, were created as a response by banks and credit unions to help their communities. Unlike regular personal loans, these loans are designed as short-term relief: They offer more favorable terms, but they also offer smaller loan amounts that have to be paid back sooner. Typically, hardship loans are $5,000 or less.

The perk of taking out this type of personal loan is that the interest rates are lower, they’re quickly funded after getting approved and you have the ability to defer your first payment up to 90 days.

These types of loans can really help with short-term relief, but remember that you still have to repay them or it could add on to your debt. Generally, this is what is required to qualify for a hardship loan:

  • You’ll need a credit history that demonstrates positive behavior.
  • Typically, you must be a member of the bank or credit union where you’re applying for the loan.
  • Some banks or credit unions may have deposit or income requirements.

To apply for a hardship loan, reach out to your bank or credit union to see if the financial institution is offering them.

5. Try to negotiate your bills

If you’re struggling to pay some or all of the bills, try negotiating them rather than not paying them altogether. You can do this the old-fashioned way by calling up your service provider, explaining your situation and hoping that they’ll cut you a break. Or there are services, such as Trim and Truebill, that will do the negotiating for you.

This likely won’t be a windfall by any means, but it could seriously lower your bills and who doesn’t love saving a couple of dollars here and there?

6. You can take an early withdrawal from your 401(k) penalty-free — but you should try to avoid it

If you’ve exhausted your emergency fund and would prefer not to take out any loans, then you may consider withdrawing funds from your 401(k). Generally, this is not advisable or favorable as it comes with a 10 percent early-withdrawal fee penalty if you withdraw before the official retirement age of 59 ½. However, that is currently waived until Dec. 31, 2020 under the CARES Act.

Only qualified individuals will be able to get this penalty waived on withdrawals up to $100,000.

You’ll need to meet one of these criteria:

  • You experienced a layoff, furlough or reduced hours due directly or indirectly to the coronavirus.
  • You or a member of your household received a COVID-19 diagnosis.
  • You cannot work because you need to care for your child.
  • You had to close your business or reduce your hours due to the pandemic.
  • You suffered adverse financial consequences related to COVID-19.

While not having to pay the early-withdrawal fee may make this a tempting option, it’s important to consider how an early withdrawal could impact your retirement plan down the road.

For instance, avoiding the 10 percent fee might sound like a good deal now, but this doesn’t take into consideration all of the compound interest you will miss out on had you let the funds be. According to a 2017 study by Mass Mutual, dipping into your retirement savings early could not only delay your retirement, but it could also reduce your overall savings by as much as 14 percent.

Learn more:

Written by
Liz Hund
Creative producer
Liz Hund is a social producer at Bankrate and occasionally writes special features on-site with a social-first angle. Her writing has been featured on MSN, Business Insider and in various local publications.
Edited by
Senior wealth editor