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Emergency Loans: What They Are & Where To Apply for Them

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Emergency, Loans, credit

If you have got an unexpected expense to meet at your end, then nothing could be better than an emergency loan. It doesn’t matter what kind of emergency requirement it is, right from car repair to house monthly payments, emergency loans have got you covered. In this article, we will learn more about emergency loans.

What are Emergency Loans?

Emergency Loans, as the name suggests, are unsecured personal loans that you can secure to meet the unexpected expenses. They are quick in nature, with disbursements happening within one or two day after loan approval. If you are lucky, then you may even get your loan amount right itself on the day that you apply.

For emergency loans, you don’t need to attach a collateral as they are unsecured in nature. Though, there are some lenders who offer secured personal loans, and for that you may have to attach a collateral.

Emergency loan amounts typically depend upon the amount that you need to meet your demands, however, normally, they are low in nature, i.e. somewhere around 10,000-100,000. In the next section of the article, you will learn the various options from where you can secure a personal loan.

Where To Get an Emergency Loan?

A payday loan lender or your credit card issuer is always there to lend you emergency loans, however, we don’t personally recommend these ways. It’s best to opt for a traditional unsecured personal loan directly from your bank or other financial institutions.

  • Banks

If you have got a bank account at a physical bank branch, then it’s best to approach there for a personal loan. Banks usually don’t work the way your most lenders work. For example – banks usually put large emphasis on factors like credit score, income, etc for decisions over your personal loan. Also, the payout speed may not be that fast, as banks have their own way of even approaching the deposition of money in the borrower’s account. Check in with your bank on what all eligibility criteria they look for, and what is the money processing speed.

  • Online Lenders

Online lenders deal in different kinds of emergency loans, leaving you with lots of options to choose from. Also, if you are lucky, then you may even be already qualified for a pre-approved loan. So, make sure you check with the online lenders for potential pre-qualification options. This can save you from going through the process of a credit check, as that can negatively affect your credit score.

At first, you may restrain from opting for a personal loan from an online lender, but don’t forget that a lot of banks also these days offer online personal loan approvals. So, ascertain that the online lender that you plan to go with is genuine, and with a strong offering.

  • Credit Unions

If you have got a credit account, then credit unions can finance you. In comparison to banks, credit unions are far more community driven and loyal to its customers. Though, it’s important to know that credit unions may not always open its gates for its normal customers. Most of the time, the emergency loans offering is just for its members or the members who have been a part of the community for a certain period of time.

Types of Emergency Loans:

  • Personal Loans

In personal loans, if it’s unsecured, then your credit score will play a huge role in fixing upon the eligibility, amount and interest rate of your loan amount. On the other side, if it’s secured personal loan, then you will have to collateralize your asset, and it could be anything from your property to car.

  • Title Loans

Title Loans work on the concept of transferring the title of your vehicle to the lender in exchange of your loan amount. In case, you fail to make the repayment of the loan amount, then the lender gets to keep your vehicle.

  • Credit Card Advances

If you own a credit card, then you can use the existing credit balance to withdraw money. Though, it’s important to consider the fact that the interest rates could be higher here, in comparison to your other modes. Also, a lot of money could be extracted out of you in the name of different fees.

  • Payday Loans

Payday loans are known for faster checkouts, however, the amount is low, carries a high interest rate, and may have faster repayment. The loan amount that you can secure from could be somewhere around $500 or less. We, personally, don’t recommend trying out this option.

Conclusion:

Emergency Loans may sound all bright and good at first, and compared to other available choices, like credit card advances and title loans, emergency loan is indeed a far better option to go for in case of money requirement. However, before that, it’s always advisable that you seek out your friends and family for financial help. If nothing works out for you, then the doors of emergency loans are always open for you.

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