How many times per day/week/month do you find yourself looking for immediate assistance and finding ways for some extra cash? You can’t adjust life to a salary – especially when you work standard 9-5 shifts. In addition, you can’t predict the emergency situations – such as surgery for your relative or car repairs.
Same day loans online are a type of personal loan that can be provided in the time of your highest need. It is created for short-term cash shortages when a borrower finds himself in a tough situation. However, the interest rates for such loans tend to be pretty high, and they are not suitable for long-term borrowing.
For example, you don’t have enough cash to pay for the car getting fixed or you have unpaid medical expenses such as an urgent surgery. It’s critical to consider whether you’ll be able to return a loan of this kind without delay, as the penalties for late payment make an emergency loan much more expensive.
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What Are Emergency Loans?
While you have to plan your personal finances so that you have an emergency fund, it’s not as easy as it sounds. Emergencies can come when you least expect them, however, you must be prepared.
Of course, the first problem most people face is the money – you either don’t have a savings account or you’re simply out of all the savings. Sometimes an emergency situation arises when your paycheck is delayed; in other words, there are tons of situations you have to consider if you think about an emergency loan.
These types of loans depend on your employment status, level of income, and other circumstances: it’s hard to predict how much you will need, but we always advise you to count your balance wisely.
Even if you have a poor credit rating it is worth considering applying for a cheaper loan lasting 12 months or more to avoid getting into further financial difficulties.
How Emergency Loans Work
An emergency loan is the type of unsecured loan with no collateral aside. It can be conveniently used to cover extra medical expenses or to settle down repair costs, for example.
Lots of businesses, careers, and homes have overcome financial crises because they decided to apply for an emergency loan.
Here are some important advantages for you to consider:
- Minimal paperwork that saves a considerable amount of time;
- Online application of emergency loan makes application and approval easier;
- Flexible repayment options balance outstanding EMIs;
- Best substitute to keep your savings safe;
- Saves borrowers from going bankrupt.
Types of Emergency Loans
There are four main types of emergency loans:
- Personal loans – helpful to settle some extra cash you need for yourself or people close to you. These loans become instantly approved to support the monetary needs of a borrower;
- Ownership loans – demand shifting the title of your asset, such as a car in exchange for liquid cash;
- Payday loans – short-term borrowings with a low-interest percentage. The lender expects you to repay a payday loan during the next pay cycle of your company;
- Credit card loans – offer instant cash through the available credit balance. Interest rates are generally higher on credit card advances.
When an Emergency Loan Is a Solution
Let’s say all of a sudden you face health issues, and the doctor advises to send you to a hospital, or a close family member just got hospitalized. In that case, you can opt for an emergency personal loan which is the best alternative so far.
This is one of the reasons lenders approve the loan faster, which is not an option for auto or home loans (they need a lot of time to step onto the releasing process). If you don’t want to get stressed out because of the releasing process, this type of loan is better.
Emergency personal loans are meant to help people with their financial burdens temporarily. Most lenders don’t ask for collateral, especially when the borrower has a good credit record.
If you pay your debts on time, and you have never faced issues violating deadlines, you will most likely be an ideal candidate for extra money in the time of your highest need.
Emergency Loans Requirements
You can get an emergency loan from lending institutions. In addition, you can get it from registered lenders or banks. If you have all the requirements, you can get qualified to apply and get approved later on.
If you have a bad credit history or no history at all you might feel uncomfortable looking for a lender who will work with you and build a mutual agreement from his side.
Here you can read about ways to improve the chances of getting a personal emergency loan:
- If a friend or a family member of yours has an excellent credit score and a potentially good source of income, add them as a cosigner;
- If you are not eligible for an unsecured emergency loan, try a secured loan. However, in this case, you need to possess a property that can be used as collateral;
- Visit Credit Union that is always on your side, by the way. These organizations have less stringent credit requirements than other lenders, and they may also offer free financial counseling.
In other words, try to manage the credit score you currently have and speak up about your financial needs. Nobody will work with you if you don’t ask questions or make suggestions.
Some Alternatives to Emergency Loans
If for some reason you cannot apply for an emergency loan, there are some options you might like:
- Ask a friend – this is not something new or innovative you will hear for the first time. This is a good old borrowing that sets out your reputation at risk if you don’t bring money back on the agreed time. Don’t hope people will just give cash to you as a gift (well, it all depends on what are those people’s intentions and what situation you’ve found yourself in)
- Apply for a 0% APR Credit Card – if you have an excellent credit score, some credit cards offer special 0% APR intro periods
- Ask creditors for forbearance – if struggling with your bills contact the creditors and explain your situation to see if they can give you any relief.
Even if it seems like the worst situation you have ever been in, don’t give up. The emergency loan might not be the best option, but this is a good alternative that has several advantages in terms of approval and repayment.
Conclusion
Emergency loans can be used in the most unexpected situations. Whenever you need extra money, don’t hesitate to review such a possibility of fast cash, but be careful and give money back on time!
