Emergency loans are meant to offer quick emergency money when immediate and unexpected emergency expenses arise. Sometimes you may experience an unforeseen financial emergency that can be solved by a fast short-term loan rather than a long-term personal loan. Why a Quick Loan?
An emergency loan is a short-term credit that is convenient and gets to you faster. It is designed to offer quick solutions to different emergencies that may happen in everyday life. This loan product is usually unsecured and can be offered even to individuals with bad credit history since it’s a small amount with a short payment period.
While there’s no specific period when you can take an emergency loan, there are several purposes for such a loan. Most borrowers use these finance options for;
- For vehicle repair to carry on with daily activities
- Emergency home repairs, for instance, during adverse weather conditions like in winter
- To pay up when an unexpected bill comes up
- To contribute or cover for a funeral cost
Like mentioned before, this type of loan is best for short-term emergencies. However, it’s not advisable to pay for the following things using a fast credit;
- Regular bills payment such as rent, electricity, gas and water rates.
- Luxurious and non-essential purchases
- Entertainment purchases
Types of Emergency Loans
This type of loan has very high interests on a generally small amount of money. You can easily qualify for one without a credit check. They come with a fast turnaround which requires you to pay back the total amount you owe the lender on your next payday. Click here to know about payday loans.
Most of these loans are usually less than $500, and the APR could go up to 400%.
Credit Card Advance
With a credit card, you borrow some money using the available balance. Credit cash advances come with typically higher APR rates compared to regular purchases. You will also get billed extra charges for processing and transaction.
For this type of loan, you will hand over collateral like a vehicle in exchange for the cash you need. If you’re unable to repay the money borrowed, the creditor is at liberty to keep the car or sell it to recover the amount.
In emergency cases, you can apply for an unsecured personal loan from any lending institution. You credit history and scores will go a long way in determining your eligibility and the amount you qualify for. Some lenders can also prefer you offer a collateral for the same.
Tips for Choosing an Emergency Loan
When exploring the available emergency loan options, you should put several tips in mind to help you get the best lender. These are;
Funding time: You need to ask yourself how soon you can receive the money once you qualify for the loan to help you get the best lender. Some lenders can take a week, while others will deposit the funds on the same day.
Fees: Confirm all the fees every lender charges before you make an application. Most creditors will charge origination fees and late repayment fees.
Repayment terms: Different lenders have a variety of loan repayment terms. So it will require you to pay a certain amount every month, within a shorter period. You need to understand this and ensure it matches your ability.
Interest rates: Compare different lender’s rates to see what you can afford to pay back. Most of these interests will depend on your credit scores. The better it is, the lower your rates could be.
Where to Get Quick Emergency Loans
Both online and traditional lenders offer fast credit, although traditional methods could take longer times for loan processing. It is simply not practical going through a lengthy process to sort out an unexpected bill.
If you urgently need some financial help directly, contact the lender or seek the help of a credit broker to get a nice creditor.
Credit brokers: a credit broker can help you get a loan within a shorter time, and what’s more, they will improve your chances of securing one. Once you send your application to a single broker, they’ll send it out to several lenders, which indeed saves your time.
Direct lender: You have the option of applying for a quick cash loan directly to a lender by completing an application form then submit it online.
You will need to meet the following criteria when applying for this loan.
- At least 18 years old.
- A resident or citizen of the country where the lender operates.
- Part-time, full-time or self-employed
- Have a stable source of income
- Be a bank account holder
Once you have the above criteria, proceed to send in your application to the lender’s website. These application forms are usually specific for same day loans.
The process is simple, and you will receive a decision on your loan application within minutes.
You will need to specify the loan amount and desired terms, then give personal details like name, phone number, email and address.
Your details will be reviewed, and the lender will contact you if they need any further supporting information.
They will then carry out a credit check and analyse whether you can afford the loan before they can make a decision.
Once you qualify for the loan and get approved, you will receive the money in your bank account in a few hours or minutes.
The average loan amount you can get as a quick loan will depend on the lender and your eligibility. While some lenders can give you a maximum of £800, others can offer you up to £1,500, depending on several factors.
The repayment period depends on the amount and your repayment plan. You can select a monthly instalments schedule that resonates with you.
Financial emergencies come in different forms, sizes and shapes. It could be an illness, car breakdown, funeral or other unexpected circumstances. If any of these happens to you and you need finances, do not shy away from asking for help. Many lenders can offer you some cash. Just shop around to find the best lender with fair interest rates.