The House of Representatives and Senate passed a short-term funding bill on Friday to keep the government from shutting down — at least for another week.
The House voted 382-30 for the stopgap funding legislation, and the Senate passed it with a voice vote soon afterward. The bill gives lawmakers until May 5 to reach a bipartisan budget agreement. The final agreement would fund the government through the end of the 2017 fiscal year, which ends September 30.
The approval came just a day after Senate Democrats blocked a quick vote on the short-term bill. Democrats insisted on delaying a vote until Republicans agreed to leave provisions on abortion, financial regulations, and the environment off the table.
Despite the quick reversal by Democrats, the two sides remain at odds over what should belong in the final agreement. With just one week to compromise or face another stopgap funding need, the government still faces a shutdown.
What is a government shutdown?
A government shutdown happens when Congress fails to pass a bill funding government agencies and operations. The funding gap shuts down government activities deemed non-essential and its effects can trickle down to consumers’ wallets.
This isn’t Congress’ first rodeo either. Although you may remember the 2013 government shutdown, you might not know about the other 17 times the government has shut down.
Going as far back as the Ford administration, government shutdowns have tended to be short, with many lasting just a few days. But some have lasted two to three weeks, putting some consumers in a tough spot financially. Here’s how a government shutdown can affect you and what you can do to prepare.
What a government shutdown could mean for you
If the House and Senate don’t pass any kind of funding bill between now and May 5, here are a few things that could happen:
Some federal employees won’t get a paycheck
Employees working for federal agencies may be out of a job for a while if a shutdown happens. Workers considered vital will continue to work during the shutdown. They’ll also likely receive payment for the work once Congress passes a funding bill. But if you’re furloughed, there’s no guarantee you’ll receive back pay for the time you missed.
What you can do: Take stock of your financial situation and make sure you have enough funds set aside to keep you afloat in case you miss a paycheck or two. If you don’t, try to avoid short-term loans, as they can charge high interest rates and require quick repayment.
Instead, consider asking a family member or friend for a personal loan. You can also apply for a personal loan through your bank or take advantage a 0% APR promotion on a credit card.
It could ruin your travel plans
If you’ve already booked a flight to visit a national park or museum, or are heading overseas, you might need to change your plans. All national parks and museums operated and funded by the federal government will shut down without an approved funding bill.
Passport services could also be delayed. That’s because the Bureau of Consular Affairs has much of its staff working in federal offices. If you waited until the last minute before an international trip to apply for your passport, you might miss it.
What you can do: If you already have your days off from work and have paid for the trip, check to see if you booked refundable flights and hotel stays.
If so, you can get your money back and postpone the trip. If not, consider contacting the airline and hotel customer service centers to plead your case. There’s no guarantee, but it doesn’t hurt to ask.
It might delay your mortgage
Mortgage lenders understand the risks associated with approving mortgage loans. They leave no stone unturned when vetting your financial stability.
With a government shutdown, employees at the Internal Revenue Service and Social Security Administration may be furloughed. Without those agencies, lenders won’t have the proper paperwork to approve your loan.
What you can do: Whether you’re building or buying a home, double check with the seller to make sure there are no penalties for a delayed settlement. Some contracts may stipulate a daily fee if funding isn’t available. If there is a fee, check to see if the circumstances warrant an exception.
It could cause setbacks with your small business loan
The federal government operates the Small Business Administration (SBA), too. So any applications for federal small business loans will likely be on standby.
What you can do: If your capital needs aren’t immediate, your best bet is to wait. Chances are, your application will get picked up again in a week or two.
If you do have immediate expenses, though, consider applying for a small business loan or personal loan through a private lender. You can also think about applying for a small business credit card with an introductory 0% APR promotion.
Whether or not Congress approves a funding bill through the end of the current fiscal year is not something you can control. But if any of the byproducts of a government shutdown affect you personally, you can still be prepared.
Knowing what can happen and how to respond can make sure a shutdown — if one occurs — doesn’t cripple you financially.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|5.81% – 15.37%1||$5,000 - $100,000||Visit SoFi|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|5.49% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|