where to get emergency loans

More than half of Americans (58%) are dissatisfied with the amount of money they have in their emergency fund, according to a Bankrate survey. This leads many people to look for emergency loans when unexpected expenses arise.

Emergency loans can be found in the same places borrowers seek traditional loans, including banks, credit unions, and online lenders. Each has its pros and cons, so find the best emergency loan for your needs.

What is an emergency loan?

An emergency loan is a type of personal loan that a borrower can use following some kind of crisis, such as medical bills or important home repairs.

banks and credit unions

One of the first sources to consider when looking for an emergency loan is your bank or credit union. This is especially wise if you have a long standing relationship. Because history could mean more competitive rates and potentially better terms.

what to watch out for

The main advantage of contracting with a bank or credit union is that it guarantees a reputable facility and a better rate if you have a relationship with that organization. However, the funding timeline may be longer than when securing a loan outside a traditional bank. This is also a great option for those who prefer a physical store, as many banks offer in-person assistance.

online lender

The process of securing an emergency loan online is so easy that you only have to enter your personal details from the comfort of your own home. Taking out a loan online also allows you to compare different loan options all at once.

what to watch out for

A distinguishing feature of getting an emergency loan from an online lender is the speed of funding. If you are in a financially precarious situation and need money as soon as possible, online lenders are your best bet. Some lenders offer same-day loans, but the vast majority have loans available within at least a few business days after approval.

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Payday Render

A payday loan is a type of instant loan that makes a small amount of money available to the borrower. These risky loans can bring him triple-digit interest rates along with hefty hidden fees.

what to watch out for

While these types of loans are attractive to those in need of quick money, they are not the recommended method. These types of loans are very likely to default, which can lead to more financial problems down the road. If you have to borrow, make sure you can pay it back on time.

Types of emergency loans

There are eight main types of emergency loans available to those in need. Each option has different uses and eligibility criteria.

Like any loan, not all emergency loans are created equal. Some even have special features such as customer support or more competitive interest rates. Consider the types of emergency loans outlined when deciding which is best for you.

• personal loan. Taken as a lump sum and paid back monthly, these can be found online at your bank, credit union, or other financial institution.

• credit card cashing. These are available to cardholders in good standing, but available amounts vary by card issuer. Also, the charges are higher than his normal APR.

• payday loan. These should only be used in extreme binds and offer small amounts of money in a short period of time.

• title loan. These loans use your car as collateral and give you quick access to cash. They can lead to your car being repossessed, but only sign off if you can confidently pay off your loan, usually within 30 days.

• A home equity loan or home equity line of credit (HELOC). Depending on the home’s value, you can use it as collateral and receive a lump sum or line of credit.

• payment plan. Best suited for large or unexpected bills, the accounting department can negotiate deals that allow you to extend the time it takes to pay your expenses.

• advance payment. This allows you to receive your paycheck sooner than usual. Depending on your employer’s policy, you may receive cash sooner in the event of an emergency.

• friends or family. This option is wise for those with strong connections as it can get complicated.

How to choose the best emergency loan

The key to getting the best emergency loan is to do your homework beforehand. When it comes time to apply for an emergency loan, keep these factors in mind:

credit score

A credit score is used as a measure of risk to a lender. So if you have a low credit score, you may not get the most favorable terms. Please take this into consideration when applying for an emergency loan. For example, if your score isn’t top notch, focus on fair and low credit lenders.

repayment terms

Consider the terms each lender offers and how they fit into your ability to repay the loan. While it may be tempting to take out a long-term loan with lower monthly payments, it can mean more interest in the long run. Instead, focus on being able to afford to pay viable monthly payments, reducing the amount of time you need to pay.

degree of interest

The overall available APR is based on macroeconomic impacts that are beyond our control, so part of the qualifying rate will depend on what the lender offers. Pay close attention to the APR and set the most competitive interest rate when purchasing an emergency loan. If your credit is short, APR will follow. However, remember that paying the full amount on time will help build credit over time.

budget

Your budget should play the role of the map when it comes to spending. Take the time to research your current spending and approve loans that you can really afford. Additionally, keep your budget for the entire life of the loan.

Conclusion

Unexpected expenses can arise, but an emergency loan can help you get out of your situation. That way, you can focus on what’s most important than the finances that come up. Even when you’re in a hurry, it’s best to shop by comparing lender offerings.