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How to Get an Emergency Loan

How to Get an Emergency Loan


Obtain quick cash for minor, pressing costs like house or vehicle repairs.


How to Get an Emergency Loan

A personal loan type known as an emergency loan provides quick funding for those who require an emergency cash infusion to cover unforeseen expenses. Emergency loans are frequently taken out for urgent home repairs or auto repairs.


While there is always an interest cost associated with borrowing money, emergency loans, a subset of personal loans, may be less expensive than other options. Finding a trustworthy lender with loan terms and rates that meet your needs requires research.


Learn more about how to get an emergency loan, how they work, and how to compare offers to find the best one.


How to Get an Emergency Loan

You must select a lender and usually complete an online application process to obtain an emergency loan.


  • Verify your credit rating: Your availability of lending options will increase with your credit score.
  • Obtain quotes from several lenders: Start there, as many lenders provide pre-qualification without requiring a hard credit check. Compare the prices and other aspects that are significant to you after you receive your quotes.


Select a lender and complete the application online. Typically, this will include your contact details, income details, and consent for a credit check to be made.


  • Assemble your paperwork: You should prepare to upload images of your ID, proof of address, and proof of income (pay stubs or W-2 forms, for example).
  • Await approval: Depending on the lender, you might hear back in minutes, but it could also take a day or two.
  • Get your money: Your loan amount should be deposited into your bank account a day or two after approval, sometimes even in less than an hour. The following month is when your first payment is due.


When Is It a Good Idea to Get an Emergency Loan?

An emergency loan can be your lifesaver when you have a necessary or unforeseen expense. Among the instances are:


  • Fixing a leaky roof (or a major appliance or other system in the house): The sooner you set it, the better. It will result in more damage and higher costs.
  • Car upkeep that protects you: Driving a car with worn tires or brakes is dangerous. If you depend on your vehicle to get to work or school, you should contact those repairs immediately.
  • Bills accrued while there was no income: Having high-interest debt could burden your finances. It may be possible for you to save money and pay off your debt more quickly if you are approved for a lower-rate emergency loan.
  • Emergency dental procedures: The cost of seeing a dentist can be expensive, even with dental insurance. If you cannot work out a payment plan with the office, consider applying for an emergency loan.
  • Travelling to fulfill family commitments: Even if it's not within your budget, there may be occasions when you must spend time with your family. For instance, you might have to see a sick loved one or attend a funeral.


When Is It Not a Good Idea to Get an Emergency Loan?

Even though personal loans can be used for nearly any purpose, there are better options than borrowing money in some non-emergency scenarios.


  • Vacations: Since they are not regarded as necessities, carefully consider your options before taking out debt to pay for one. You will pay monthly interest on that loan for several years.
  • Festivities: Although many people take out loans to pay for weddings, Sweet 16 parties, and other celebrations, it's usually preferable to save up the money in advance.
  • If you have less expensive options: Before you borrow, discuss your options with your service providers. As in the case of the dentist above, some bills can be settled with payment plans.


Additionally, there are circumstances in which using a credit card rather than a loan could be preferable if you know you will be able to pay off the balance in a few months.


What You Need to Get an Emergency Loan

Your eligibility for an emergency loan is determined by your creditworthiness (your credit score) and your ability to repay the loan (your income). Because of this, lenders typically have a set of requirements that all borrowers must fulfill. These may consist of the following:


  • Age: Most loans require you to be at least 18.
  • Citizenship: If you are not a citizen of the United States, be aware that some lenders only work with such individuals.
  • Income/Employment: Be prepared to provide documentation attesting to your current employment status and pay. The lender wants to ensure you have the resources to repay the loan.
  • Credit score minimum: Lender requirements will differ, but generally speaking, if your score is 670 or higher—considered "good," you should have no trouble qualifying. Even if the interest rates are higher, some lenders will accept applications from borrowers with credit scores as low as 580.


Additionally, during the application process, you should anticipate uploading a mix of the following documents:


  • Government-issued ID (i.e. birth certificate, driver's license, passport)
  • Proof of address (utility bill, mortgage statement, lease agreement, property tax bill, etc.)
  • Contact information (phone, email address)
  • Bank statements
  • W-2 forms, 1099s, and pay stubs
  • Tax returns
  • Choosing an Emergency Loan


To ensure you get the best deal, research before choosing a service provider for an emergency loan. It's essential to consider every vital loan term and assess the lender. Compare these factors first.


Turnaround Time

Pay close attention to how long the lender says it usually takes to get approved and funded if you need money quickly. Some may close in a day or two, while others may take several business days.


Interest Rate

The interest rates on emergency loans can vary greatly, and your credit score will directly impact the speed you are eligible for.


Fees

While some lenders deduct monthly administrative fees or an upfront origination fee from the loan amount, others do not. The costs and their triggering mechanisms should be enumerated in the loan disclosure.


Customer Service

Although online applications are convenient, you can quickly get assistance via phone or chat if you have any questions or concerns.


Reputation

If the lender is a business you are still getting familiar with, look up its status with the Better Business Bureau and read online reviews of the lender. In particular, you should ensure you're not working with a predatory lender if you need money quickly.


What's Negotiable

If your credit is good, you can haggle over some features of an emergency loan, like the interest rate or origination or administrative fees. To find out which lenders are prepared to compete for your business, you can also use the rate quotes you obtain from other lenders.


Compare the Best Personal Loans

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Alternatives to an Emergency Loan

An emergency loan is one of many options when you need money fast. Here are some others to consider:


  • Credit card with 0% APR offer: A few credit cards offer an extended 0% APR on first purchases, allowing you to pay off the balance over several months. This is an advantageous strategy because you may pay no interest at all. Please be aware that receiving your card could take a few days.
  • Borrow from friends or family: This might be worth a try if you know someone who can lend you a hand when needed. Just ensure you have a repayment plan that works for them, and don't end your relationship.
  • Payday loans: Although they are a good option when things get tight, they are costly and should only be used as a last resort. They give you an advance of your paycheck. The only benefit is that long-term installments won't be an issue for you.
  • Request emergency assistance: Before taking out a loan to pay your debts, contact your lenders and service providers to find out about any assistance or hardship programs in case of a natural disaster or other personal tragedy that has left you needing money.


The best course of action is to open an emergency savings account that should only be used in cases of genuine emergency. You can feel secure knowing that money is there in case you need it, rather than depending on credit or borrowing.


What Credit Score Is Required to Apply for an Emergency Loan?

Although each lender has a different minimum credit score, some lend money to borrowers with "bad" credit (580 or even lower in certain situations). You will likely require a score in the mid-700s to be eligible for the best rates.


How Quickly Can You Get an Emergency Loan?

If you apply online with a lender that offers a quick application process, you can receive an emergency loan in a matter of days or less. If you start early enough, some may even offer same-day funding.


How Quickly Do You Need to Pay Back an Emergency Loan?

Emergency loans are repaid in equal monthly installments, just like regular personal loans. There are two to seven-year terms available. Your monthly payment will be less the longer the term, but your total cost will be higher.


Are There Any Restrictions on What You Can Use an Emergency Loan For?

You can use an emergency loan for almost anything, with a few notable exceptions. A personal or emergency loan cannot be used to pay for business expenses, a down payment on a home, or college tuition.


What Are the Risks of Getting an Emergency Loan?

Anytime you take out a loan, even for an unexpected expense, you incur new debt. You may overextend yourself and find yourself unable to repay the loan. Being past due could lead to a lawsuit from the lender and a decrease in credit score.

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