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If you’re facing a financial emergency and don’t have enough money set aside in savings to cover the expenses, emergency loans might help.
These are personal loans with fast funding times to quickly get you the money you need.
Here’s what you should know about emergency loans and how to get them:
- Emergency loans
- How to qualify for an emergency loan
- Qualifying for an emergency loan with bad credit
- What can emergency loans be used for?
- How to compare emergency loan lenders
- How to apply for an emergency loan
- Be careful with other types of emergency loans
- Alternatives to emergency loans
- Build an emergency fund
Emergency loan lenders
Several lenders offer personal loans for emergencies. You’ll typically need good credit and verifiable income to qualify — however, some lenders have less strict requirements than others.
Here are Credible’s partner lenders that provide emergency loans:
With Avant, you could get a personal loan up to $35,000 with funding as soon as the next business day. Avant could also be a good choice if you’re looking for a personal loan for bad credit.
Axos Bank offers personal loans for up to $50,000 with funding as soon as the next business day if you’re approved. To qualify for a personal loan with Axos, you’ll generally need good to excellent credit.
Best Egg loans are available for up to $50,000 and are typically funded in one to three business days after verification. You might also be able to qualify for a lower interest rate with Best Egg than you’d get with a traditional lender.
Discover offers several types of financial products, including personal loans ranging from $2,500 to $35,000. With a Discover personal loan, funds could be sent as soon as the next business day after acceptance.
LendingPoint loans are generally geared toward borrowers with poor or fair credit, which could make it easier to get approved. With LendingPoint, you can borrow up to $36,500, with funding as soon as the next business day.
If you need a larger personal loan, LightStream could be a good option. LightStream offers personal loans up to $100,000 and funding potentially as soon as the same business day.
Borrowers with poor credit can get a loan up to $20,000 with Universal Credit. Repayment terms are three to five years, with funding as soon as one day, once approved.
Upgrade is another lender willing to work with borrowers with less than stellar credit. You could get a loan up to $35,000 with Upgrade, with funding as fast as a day of clearing verifications.
Loans from Upstart are available from $1,000 to $50,0005. With Upstart, you could get your funds within one to three business days.
Learn More: Where to Get a Personal Loan
How to qualify for an emergency loan
Qualifying for a personal loan for emergencies is similar to getting approved for most other loans. The lender will typically consider your credit history, income, and ability to repay the loan in the future to determine if you’re eligible.
- Avoid taking out other new credit
- Keep your credit card balances low
- Make any existing loan payments on time
Qualifying for an emergency loan with bad credit
You’ll typically need good to excellent credit to qualify for a personal loan — a good credit score is usually considered to be 700 or higher. However, some lenders specialize in bad credit loans — which means you might still be able to get an emergency loan if you have poor or even no credit.
Just keep in mind that personal loans for bad credit generally come with higher interest rates compared to good credit loans.
Even if you don’t need a cosigner to qualify, having one might get you a lower interest rate than you’d get on your own. Just keep in mind that a cosigner is legally responsible for the loan if you can’t make your payments.
Check Out: Improve Your Personal Loan Application: Tips for Boosting Your Chances of Loan Approval
What can emergency loans be used for?
An emergency personal loan can be used to cover nearly any personal expense. For example, you could take out a personal loan for:
- Medical bills: You can use a personal loan for unexpected treatments, MRIs, and any other medical expenses.
- Dental costs: Personal loans can cover fillings, crowns, veneers, or any costs that your dental insurance doesn’t cover.
- Car repairs: If you get into an accident or need a car repair you weren’t planning for, a personal loan can help.
- Rent or mortgage payments: Losing a job or getting behind on bills can cause you to miss rent or mortgage payments. A personal loan can bridge the gap so you don’t face any penalties.
- Utility payments: If your electric bill is higher than usual and you’re struggling to cover it, a personal loan can help.
- Funeral expenses: Funerals can be expensive once you factor in all the costs. Consider a personal loan if the expenses are out of reach.
- Home repairs:You may be able to borrow up to $100,000 or more with a personal loan, which can help with pricey repairs like fixing a burst pipe or roof issue.
For example, some mortgage lenders provide:
- Forbearance options that will reduce your payments or temporarily postpone your payments
- Loan modification that will permanently change your loan terms, such as reducing your payments or lowering your interest rate
How to compare emergency loan lenders
While personal loan lenders might look similar on the surface, it’s important to shop around and compare your options from as many lenders as possible — this way, you can find a loan that suits your needs.
Here are several important factors to keep in mind as you weigh your lender options:
- Eligibility requirements: While these can vary by lender, some common requirements include having good credit, verifiable income, and a low debt-to-income ratio. If you don’t meet these criteria on your own, you might still be able to get approved with a lender that offers loans for bad credit or with the help of a cosigner.
- Loan amounts: You can typically borrow $600 up to $100,000 (or more) with a personal loan. Be sure to borrow only what you need to keep your future repayment costs as low as possible.
- Interest rates: Your interest rate will play a major role in determining your overall loan cost. The rate you’re offered depends on several factors, including your credit and the repayment term you choose. In general, the higher your credit score, the better your rate will be.
- Repayment terms: Personal loan repayment terms usually range from one to seven years, depending on the lender. While picking a longer term can get you a lower monthly payment, it’s usually best to choose the shortest term you can afford to keep your interest costs as low as possible. Additionally, many lenders offer better rates to borrowers who opt for shorter terms.
- Time to fund: If you’re approved, you can typically expect to get your personal loan funds within one week — though some lenders offer next- or same-day loans to approved borrowers. Generally, online lenders provide faster funding than banks or credit unions, which could be especially helpful when you need to cover an emergency expense.
- Online services: Online lenders usually offer a faster, more streamlined approval and funding process compared to other lenders, which can make them a good choice for an emergency loan.
Also be sure to consider how much a loan will actually cost you so you can be prepared for any added expenses. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Check Out: How Long It Takes to Get Approved and Get a Personal Loan
How to apply for an emergency loan
While emergencies are tough situations, getting an emergency loan doesn’t have to be. Follow these four steps to apply for an emergency loan:
- Shop around and compare lenders. Be sure to compare as many lenders as you can to find the right loan for your situation. Consider not only interest rates but also repayment terms, any fees charged by the lender, and eligibility requirements.
- Pick your loan option. After comparing lenders, choose the loan option that best suits your needs.
- Fill out the application. Once you pick a lender, you’ll need to complete a full application and submit any required documentation, such as tax returns or pay stubs.
- Get your funds. If you’re approved, the lender will have you sign for the loan so the funds can be released to you — often through direct deposit. The time to fund for a personal loan is usually about one week — though some lenders will fund loans as soon as the same or next business day after approval.
If you’re ready to find your loan, remember to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from multiple lenders in just two minutes.
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Be careful with other types of emergency loans
If you’re facing an emergency, you might be tempted by other types of fast-access loans, such as:
- Payday loans: These are unsecured, short-term loans designed to be paid back by the next payday. While payday loans typically don’t require a credit check, they can come with interest rates ranging from 300% to 500%.
- Pawn shop loans: With this type of loan, you’ll leave a valuable item with a pawn shop in return for borrowing money. Like payday loans, pawn shop loans usually come with extremely high interest rates. If you pay the loan back as agreed, you’ll get your item back — but if you don’t, the pawn shop can sell it.
- Car title loans: These loans put your car’s title on the line as collateral. If you don’t pay the loan back as agreed, you might lose your vehicle.
Learn More: Small Personal Loans
Alternatives to emergency loans
If an emergency personal loan doesn’t seem right for you, here are a few alternatives to consider:
- Credit union loans: Because credit unions are nonprofit organizations, you might be able to get a lower interest with a credit union compared to a bank. Keep in mind that while you might not have to be a member of the credit union to apply, you’ll need to join if you are approved and want to accept the loan.
- 0% APR credit card: Some credit cards come with a 0% APR introductory period — which means you could avoid paying interest if you repay your balance before this period ends. However, if you can’t pay off your card in time, you could get stuck with some hefty interest charges.
- Payment plan or hardship options: If you’re facing an emergency or hardship, your creditor might be willing to work out a payment plan. Some creditors also offer hardship options. Be sure to reach out to your creditor to see what options might be available to you.
- Help from family or friends: Temporarily borrowing money from family or friends could help you navigate a financial challenge. This could also impact your relationships, though, so proceed with care.
- Paycheck advance: If you have a steady job, your employer might be willing to offer a payroll advance in some circumstances.
- Personal line of credit: A personal line of credit is a set of funds that you can draw from, up to your limit, at any time. You pay interest, but only on the amount you borrow. A personal line of credit is typically an unsecured revolving account, meaning you replenish your limit every time you repay what you borrowed, and you don’t have to put up collateral.
Build an emergency fund
Having an emergency fund could help you avoid the need for an emergency loan in the future. Generally, emergency funds should contain enough money to cover three to six months’ worth of your expenses.
How to start an emergency fund
If you’d like to start an emergency fund, follow these three steps:
- Understand your expenses and budget. Run through your budget to see what you can afford to put toward savings each month. Also look for areas where you might be able to trim expenses to free up more cash for your savings.
- Open a high-yield savings account. With a high-yield savings account, you’ll enjoy a higher annual percentage yield than what you’d get with a regular savings account. This could help increase your savings more quickly.
- Make regular contributions to your emergency fund (even if they’re small). Get into the habit of setting aside a little for your savings each month —even if it’s as little as $5 or $10 per week. Setting up automatic transfers from your paycheck to your savings account could help make this even easier.
Keep Reading: How Personal Loans Impact Your Credit Score
Eric Rosenberg contributed to the reporting for this article.
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 5.40%-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 10%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.