Even if you try to foresee the unforeseen, financial emergencies can knock at your door at any moment. From a job loss to a funeral or your family member’s illness, there are many situations that can hurt your budget all at once. If you need money fast with bad credit but don’t have enough savings to do it on your own, emergency loans may be your best option.
An emergency loan is a secured or unsecured personal loan with minimum eligibility requirements and fast money funding. These cash advances generally have no minimum credit score requirement, so they are also available for bad credit borrowers. If you’re searching for “I need a loan urgently,” emergency loans are exactly what you need.
There are different types of emergency loans that have their own nuances and cases of use. Let’s find out what are the best emergency loans near me and how you can get one with poor credit.
Emergency Loans: Overview
An emergency loan is a cash advance with fast loan funding and easy-to-meet eligibility criteria. Like all other personal loans, emergency cash advances can be used to cover any emergency expense or personal needs. However, unlike a traditional personal loan from a bank or credit union, an emergency loan may be a good solution for applicants with bad or poor credit. Why? Because emergency loan lenders usually don’t pay attention to borrowers’ credit scores and don’t perform a hard credit inquiry.
Emergency loans are very fast. The approval process typically takes less than one hour. Once a lender approves your application, you will get emergency loan funds directly in your bank account as soon as the next business day. It may also be same-day funding if you manage to apply early in the morning on a business day. The exact moment depends on how fast your loan verification will be.
Maximum and minimum loan amounts vary. Typically, an emergency loan offers a loan amount from $50 to $5,000. Depending on the type of emergency loan, it may have repayment terms from a couple of days to 24 months. Thus, emergency cash advances may be either repaid in affordable monthly payments or in one lump sum.
At the same time, an emergency loan is basically an expensive type of borrowing. It happens because online lenders try to minimize the risk of defaulters by setting high interest rates on the loans they offer. Thus, depending on the type of loan, cash advance fees may be about $10-$30 per each $100 borrowed. However, urgent loans are still one of the best financial solutions in case of emergency expenses.
Types of Emergency Loans
Emergency loans may be divided into four types. Each of them meets various borrowers’ needs due to the different loan terms and amounts they offer.
Payday Loans
Payday loans are short-term cash advances with a limited loan amount and repayment terms that don’t exceed 30 days. Commonly, paycheck lenders allow you to borrow from $50 to $1,000, depending on the state and your income. Payday loans also offer fast funding directly to your active checking account. Direct lenders usually transfer money within a business day or even earlier, which makes payday loans almost perfect for financial emergencies.
One of the best things about payday loans is that they are available with any credit score. Online lenders usually don’t make hard credit checks through main credit bureaus, so it allows you to borrow money without any records in your credit report. The requirements for getting a paycheck loan are generally very simple, so these cash advances are very popular with borrowers with poor credit scores and below-average incomes.
A payday loan must be repaid in one large payment by your next paycheck. The total loan cost consists of the initial loan amount plus interest rates and origination fees. As payday loans are pretty expensive, the annual percentage rate may be even higher than 400%. However, payday cash advances are one of the best loan options if you need to get fast cash to overcome your small financial problems.
Installment Loans
Installment emergency loans work almost like personal loans but with fast funding. They allow you to borrow up to $5,000 and turn back the loan amount plus an interest rate and origination fee within 24 months in equal monthly payments. Thus, a longer loan term makes your monthly payment lower, which makes an installment loan more affordable.
Installment loans also offer equal credit opportunities for borrowers with any credit scores. Whether you have poor or excellent credit, you’re welcome to apply if you can prove your income is enough to make your monthly payment on time. As installment loans were created to help people with urgent money needs, online lenders strive to simplify the loan approval process. In most cases, you will get the assistance within a business day.
Nevertheless, installment loans are also high-interest loans. Interest rates on such cash advances may reach 100% APR. Considering the fact that installment loans have a longer repayment period, your overpayment may be significant.
Title Loans
Title loans have lower interest rates compared to payday or installment loans. However, there is a nuance. You have to provide the lender with collateral to get the amount you need. A title loan usually uses an applicant’s car as a pledge and offers up to 80% of your estimated car value financing.
Unlike unsecured personal loans, title loans always come with the risk of losing your vehicle. If anything goes wrong and you won’t be able to make your payments on time, the lender can repossess your auto. Therefore, you should estimate all the risks and make sure loan payments suit your budget before applying for a title loan.
Pawn Shop Loans
Loans from pawn shops provide you with money in exchange for some of your valuable property. One of the main advantages of pawn shop loans is that you don’t need to give the lender access to your checking account. At the same time, there is still the risk of losing your property in case of a payment delay.
What Can My Emergency Loan Be Used for?
Emergency loan lenders have no restrictions on your loan purpose. You can spend the money you get as you wish. However, urgent loans are usually very expensive, so you should use them wisely and avoid unnecessary spending so as not to get into a debt trap.
Most creditworthy borrowers use urgent loans to cover unexpected expenses, such as medical bills or car repair works. Urgent loans may also be used to consolidate debt or make ends meet till your next payday.
How to Get a Loan for Emergency With Bad Credit?
Unlike personal loan lenders, a direct lender makes only a soft credit check that doesn’t affect your credit score. Payday lenders are usually more focused on your income, not your credit history. They just need to know you will be able to repay the loan proceeds plus an interest rate on the due date. That is why you’re welcome to apply for an emergency loan with any credit score if you can prove you have at least $1,000 income on a monthly basis.
Pros and Cons of Emergency Loans
Here are the main advantages of urgent loans:
- easy to apply;
- fast money transfer;
- available with a poor credit score;
- no paperwork or faxing is required.
However, emergency cash advances may not suit everyone because of theirs:
- high costs;
- limited loan amounts;
- may require collateral;
- inconvenient payment plans for some loan types.
Available Alternatives to Emergency Loans for Bad Credit
Personal Loans
Personal loans for bad credit are offered by banks and credit unions. These traditional loans have interest rates from 6% to 36% APR and flexible loan terms of up to 60 months. You can use personal loan funds for almost any purpose, from covering your unexpected expenses to going on vacation. However, banks and credit unions always run hard credit checks and make loan decisions relying on your credit usage and credit history.
Although some traditional financial institutions offer secured personal loans to make the assistance accessible for borrowers with bad credit, a personal loan still requires a hard credit check that affects your credit score. Personal loans also require many documents to apply and have a longer approval process. That is why they can’t meet your urgent money needs.
Credit Cards
Credit card cash advances allow you to have some additional money within your credit limit. You can access it at any moment, wherever you are. A credit card cash advance is also a good way to build or improve your credit score if you will pay off your balance on time. Some financial institutions also offer 0% APR credit cards that allow you to use cash for free within a promotional period. Nevertheless, you should pay attention to the repayment terms and conditions your credit card issuer has set. In most cases, you will face monthly payments you can’t afford if you won’t be able to repay your balance within the promotional period.
P2P Lending
If you need a small amount and don’t want to pay high interest and origination fees, you may ask your friends or family members to lend you the sum you need. However, many people think it always has some relationship implications.
Application Steps for Emergency Loans Bad Credit
Depending on the lender, you can apply online or visit a store. Although some application details may vary from lender to lender, here are common steps you should take to get an emergency loan:
- Fill out a loan request form. These forms are usually very simple. In most cases, it takes less than 10 minutes to complete.
- Get a loan decision from a reputable lender. As urgent loan lenders usually check your personal data through alternative means, it takes them about 15 minutes to make a loan decision and send you a response.
- Sign a loan agreement. Emergency loans for bad credit have different terms, so you should read your loan contract carefully and make sure the conditions meet your expectations. If everything is clear, e-sign the agreement.
- Get the loan proceeds. The lender will deposit the funds to your bank account as soon as the next business day. In some cases, lenders may also use your savings account to transfer the money.
Things to Consider Before Getting an Emergency Loan Bad Credit
Even if you have an emergency that can’t wait for too long, take some time to compare different offers before choosing the right financial solution among all the loan options in the market. While comparing lenders, pay attention to the loan cost, terms, prepayment penalties, and the origination fee, as well as qualification and minimum credit score requirements. Also, you should ask yourself how much you can afford to borrow. Don’t take out more than you really need, even if you were approved for a higher loan amount.
Where Can I Get Urgent Loans for Bad Credit?
Many financial institutions and lending companies now offer urgent loans. Everything depends on the type of loan you choose. You may consider loans from banks, credit unions, online lenders, pawn shops, or other financial institutions. However, don’t forget that a bank or a credit union will check your credit report details through major credit reporting bureaus.
Hear from an Expert
Q: Can I get an emergency loan with guaranteed approval?
A: Unfortunately, a lender can’t promise you will get a loan. It needs to check your personal information and debt-to-income ratio before making a loan decision. Thus, submitting an application form doesn’t guarantee you will get a loan.
Q: Does an emergency loan with no credit check really exist?
A: Unlike a bank or credit union, an online lender doesn’t perform hard credit checks. However, they still check your data through alternative sources. This verification is called a “soft credit check.”
Q: Can I Get an Emergency Loan Same Day?
A: Although emergency same-day loans are real, an online lender can’t guarantee you will get the funds by the end of the same day. It mostly depends on the speed of your loan verification process. In most cases, you will get a loan amount as soon as the next working day. Nevertheless, you can apply before 10:30 AM on a weekday to increase your chances of getting a loan on the same day.
