You might be experiencing a financial emergency right now without enough money saved up to cover the expenses. If that sounds like you, the good news is emergency loans are available to help you with your problem, as they can provide fast funding to help you get the money you need quickly.
Emergency Loan Examples
Emergency loans can come in different forms. Here are some examples you might want to know:
Cash Advances. You can get the cash you need with a cash advance if you currently have a credit card. You can choose to use your credit card to get some cash through an ATM or bank. The money you borrow can be added as part of your credit card payment.
Personal Loans. Personal loans are offered by many types of lenders like banks and credit unions. If you plan to get one fast, consider online lenders when you need cash. This type of loan is considered an installment loan, which means that you’ll pay back the loan in increments over a set period. Personal loans tend to be unsecured and can be repaid for several years. Interest rates can vary from one lender to another. However, the loan rates usually depend on several factors. This includes your income, credit score, and any current debt.
Payday Loans. People with bad credit tend to go for payday loans to get some cash fast. This type of loan is a short-term loan for small loan amounts that usually range from $300 to $1000. However, you need to be careful, as payday loan annual percentage rates (APRs) and fees can run as high as 400% or even more.
Car Title Loans. Car title loans are also a common option for people with bad credit who want to get some money fast. Like payday loans, this type of loan is also considered short-term, and it offers small loan amounts. Car title loans are secured loans. This means that you’ll need to provide collateral; in this case, the title of your vehicle. Of course, that means if you default on this type of loan, your car can be repossessed.
Pawn Shop Loans. When it comes to pawn shop loans, you can use a valuable item as collateral. The pawnshop can provide you with the cash you need in exchange for the valuable item, and you’ll need to pay off the loan by its due date. Otherwise, the pawnshop will keep the valuable item and resell it to get back the money.
How to Get an Emergency Loan
Now that you know the various ways to secure an emergency loan, let’s look at some steps you can consider if you plan to get one:
Check Your Credit Score
Depending on your current credit status, one loan type might be more suitable for you than another. For example, if your credit status is considered excellent, you will definitely get a better loan term and interest rate with a personal loan than other options.
If you think you have a poor credit score, there’s no need to worry. Several lenders can offer short-term loans for people like you. Take some time to check your credit score and decide which loan option is more realistic for your current situation.
Shop Around
If you plan to get a loan, it’s recommended to shop around. Doing so means you compare loan terms and interest rates from one lender to another. This can help you decide which option and what type of lender you should go to.
If you’re thinking of getting a credit card cash advance and you have several credit cards, you can opt to check the APRs and cash advance fees on all of your cards. This can help you know which card will charge you the least. Always remember to check the cash advance limit to make sure that you’ll have a chance to get the money you need without having to tap too many credit cards.
When Is It Right To Take Out An Emergency Loan?
Getting an emergency loan makes sense if you don’t have enough money to cover your unexpected or emergency expenses. However, depending on your current credit status, some emergency loans might do you harm instead of good in the long run. For example, i’ll help if you learn more about payday loans before you decide to get one, as other lenders tend to offer high-interest rates.
To Sum It Up
Emergency loans come in different forms; but this type of loan can provide you with the amount you need fast to cover your unexpected expenses. However, in choosing the right type of emergency loan, it’s always best to always consider your current financial situation.
Photo Credit: RODNAE Productions
The interest rates on payday loans are crazy! Be careful out there. There are better options for sure.
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