No one is immune to emergencies. Whether a natural disaster strikes, your home is pending foreclosure, you incur an unexpected medical expense, or any other number of emergency situations, it can be financially devastating. If you don't have emergency savings to rely on in a situation such as these, you may need an emergency loan.
We found 9 options for your requirement
7.99% - 23.43%
Est. APR Range$5,000 - $100,000
Loan Amount2-7 years
Loan TermGood For: High loan amounts available, no fees
Good For: High loan amounts available, no fees
6.99% - 35.99%
Est. APR Range$2,000 - $50,000
Loan Amount2-5 years
Loan TermGood For: Quick approval rates, flexible payment options.
Good For: Quick approval rates, flexible payment options.
7.96% - 35.97%
Est. APR Range$1,000 - $50,000
Loan Amount2-7 years
Loan TermGood For: Low loan amount
Good For: Low loan amount
7.99% - 35.99%
Est. APR Range$2,000 - $36,500
Loan Amount2-6 years
Loan TermGood For: Fast funding
Good For: Fast funding
8.3% - 36%
Est. APR Range$1,000 - $40,000
Loan Amount2-5 years
Loan TermGood For: Co-applicants, fast funds.
Good For: Co-applicants, fast funds.
8.99% - 35.99%
Est. APR Range$2,000 - $50,000
Loan Amount3-5 years
Loan TermGood For: Getting funds quickly
Good For: Getting funds quickly
9.95% - 35.95%
Est. APR Range$2,000 - $35,000
Loan Amount1-5 years
Loan TermGood For: Getting funds quickly
Good For: Getting funds quickly
11.69% - 35.93%
Est. APR Range$1,000 - $50,000
Loan Amount3-5 years
Loan TermGood For: Low income criteria, fast funds
Good For: Low income criteria, fast funds
21.99% - 35.9%
Est. APR Range$500 - $12,000
Loan Amount2-5 years
Loan TermGood For: Flexible payment options, fast funds.
Good For: Flexible payment options, fast funds.
What is an emergency loan?
Emergency loans come in two categories. The first is your traditional personal installment loan. These require a decent credit score and verifiable income. The second type of emergency loan is a short-term option, like a payday loan or title loan. However, these loans can be highly predatory. So, for the purposes of this article, we’re going to focus on personal loans for emergencies.
How do they work?
An online search for “emergency loans” will yield hundreds of results, all of them lenders that are offering personal loans which they have classified as emergency loans. They’re unsecured installment loans. The borrower does not need to put up collateral and the repayment terms will be for fixed monthly payments over a period of months or years.
How do I use an emergency loan?
An emergency loan can be used for just about anything, including medical bills, rent or mortgage payments, utilities, home or car repairs, or other essential expenses. Be sure to compare personal loans and read the terms and conditions of the loan to ensure there are no restrictions as to what the funds can be used for. Some lenders may require you to use the loan for specific purposes, such as hospital bills, while other lenders may have more flexible terms.
Once you apply for the loan and are approved, you’ll receive the funds in a lump sum. You can then use those funds as you need them. You’ll also need to start making payments immediately to avoid impacting your credit score and getting further into debt.
Where can I get an emergency loan?
Banks, credit unions, and online lenders all provide personal loans that can be used for emergency expenses.
Banks offer in-person customer service that you may find valuable, especially if you have a standing relationship with a bank. However, these institutions often take longer to process applications and fund the loan, so if you need the cash quickly, talk to the bank first. You may also have a better chance of approval if you’re an existing customer.
Loans from credit unions are typically only an option for credit union members. However, in some cases, becoming a member might be as simple as filling out an application. This may be worth it as credit unions typically have lighter requirements and sometimes better interest rates. Select credit unions also offer payday alternative loans with better repayment terms.
Online lenders can be a good option for an emergency loan because their approval processes can be extremely quick, so you can access the cash you need fast. Additionally, most online lenders allow you to get prequalified before even applying to see if you qualify and what your interest rate and monthly payment would be.
What are the different types of emergency loans?
There are a few different types of emergency loans:
1. Personal loans
You can get an unsecured personal loan pretty quickly with an online lender. Some lenders have application, approval, and funding processes that take one or two business days. Your ability to qualify, and the interest rate you get, depends on your credit score and history, income, and other factors. The best personal loan for you is one that has a lower APR and monthly payments you can afford.
Related: How to Get a Personal Loan
2. Payday loans
Payday loans are a short-term option for small amounts of money. They typically have terms as short as a few weeks, or until your next payday, and offer a maximum of $500. Payday lenders often charge exorbitant fees that can equate to up to 400% APR, but they will give you money on the spot without a credit check. Typically, all you need is a job and a paycheck to qualify. It’s important to note that payday loans are often highly predatory and make it all too easy to fall into a cycle of debt.
3. Title loans
Like payday loans, title loans do not require a credit check and are typically used for lesser amounts of money than a personal loan. The loan is secured by the title to a car or other asset that the lender will own if you default on the loan. Approval is quick and cash is available immediately, but you’ll pay a high price for it. Typically title loans come with monthly fees that can equate to 300% APR.
Emergency loans to avoid
While payday loans and title loans allow quick access to cash in the case of an emergency, they should be avoided at all costs. These loans are risky options with significantly high APR (up to 400% or more), and if you don’t repay the loan within the short term, you can quickly fall into a cycle of debt or lose your assets.
Another emergency loan to avoid is a pawn loan, when you give a valuable item to a pawn shop, the shop assesses the value, and then gives you a loan based on that valuation. It must be repaid with interest, or you’ll lose the item. These loans also have extremely high fees, up to 25% of the loan amount accrued monthly, and come with the risk of losing your items.
Finally, credit card cash advances should also be avoided if possible. A cash advance is when you borrow cash available through your credit balance. These advances typically have higher APRs than regular credit card purchases, averaging 21%, and fees, averaging between 2% and 5%. Plus, interest starts accruing right away, so you’ll quickly be increasing the amount you must pay back.
Who emergency loans are best for
Emergency loans may be best for someone who:
- Has time-sensitive or urgent expenses, and saving enough isn’t an option.
- Doesn’t have enough cash on hand or savings to cover an emergency expense.
- Can afford the loan’s monthly payment.
- Has a solid enough credit score and history to get a lower APR to avoid additional debt.
Related: Reasons to get a personal loan
Just remember, not all emergency loans are the same, and some are better or more recommended than others. Take time to compare your options and be sure you’re choosing the right one for you.
Pros and Cons of Emergency Loans
| Pros | Cons |
|---|---|
 Fixed monthly payments |  Taking on more debt |
| Fixed interest rate | Tough to get with bad credit |
| Flexible payment terms | Doesn’t solve original problem |
Alternatives to emergency loans
Alternatives to emergency loans depend on the emergency itself. Some emergency expenses can be resolved with a credit card. Others require an influx of new cash from an outside source. If the personal loan option is not right for you, try one of the following:
1. Zero-interest credit card:
If your expenses are smaller and you have an excellent credit score, consider applying for a 0% APR credit card. You won’t have to pay any interest on the balance for a certain period of time on purchases and/or balance transfers. Just be sure to pay off the balance before the intro period ends.
2. Borrow from friends or family:
If you have a trusted friend or family member, ask if you can borrow the money you need. Just be sure to set clear expectations and create a repayment plan and timeline.
3. Repayment plans:
If you need quick cash for medical expenses, talk to your provider or hospital about setting up a repayment plan or if there are other financing options available to you. For example, some allow you to pay a portion up front in cash and then they will settle your bill for the lower amount. Or, they may have a monthly repayment plan.
4. Home equity loan or HELOC:
This is essentially putting your house on the line to pay for the emergency. That is a serious gamble, one that could lead to homelessness if you cannot afford to pay the loan off. Put some careful thought into doing this.
Related: Home Equity Loans vs. Home Equity Lines of Credit
Advice for building an emergency fund
One way to prevent needing an emergency loan is by building an emergency fund. Even if you’re in need of quick cash now, it’s never too late to start building one for emergencies in the future.
An emergency fund should be able to cover at least six months’ worth of expenses, and should only be accessed in an emergency. Some tips to get you started include:
- Keep track of your spending and set a realistic budget to ensure you’re only spending on necessary expenses and putting everything else aside until you’ve built up your emergency fund.
- Set up an automatic transfer in your checking or savings account. Each week or month, transfer a small amount of money automatically into your emergency fund.
- If you get a tax refund, economic impact payment, rebate, or other type of unexpected income, put it in your emergency fund.
- Take advantage of cash back credit card rewards and automatically transfer them into the emergency fund account. You can save as you spend.
- Explore liquid, high-interest savings accounts for your fund. This gives you access to the cash when you need it, but can make the savings work for you and earn as you save.
How an emergency loan will impact your credit score
An emergency loan will impact your credit score in a few ways:
- Your score is not affected if you get prequalified for loan because it will only trigger a soft credit check, which does not impact your score.
- Your score will go down slightly when you first take out the loan due to the hard credit inquiry from the lender.
- Your score will then steadily rise as you make your monthly payments on time. However, if you make late payments or miss them altogether, your score can significantly decrease.
Emergency personal loans for bad credit
There are potential catch-22’s in this scenario. Financial emergencies often lead to bad credit. Getting an emergency loan with bad credit is more difficult and expensive. Interest rates will be higher and the amounts available to borrow could be lower. Lenders consider anyone with a credit score under 670 as “bad credit borrowers.”
Pros and cons of emergency loans for bad credit
| Pros | Cons |
|---|---|
| Instant money | High interest |
| Fixed interest | Low approval rate |
| Manageable payments | Fees and penalties |
| Improved credit score | Debt trap |
This list does not apply to all emergencies, but it is standard for most people applying for emergency loans with poor credit. The benefits are fast cash, fixed interest, manageable monthly payments, and a chance to improve their credit score by making monthly payments on time. At first glance, that looks like a good deal.
Of course, lenders will charge a higher interest rate and approval is difficult with a lower credit score. It is not impossible, but you can expect to pay a high price for it. The origination fee and monthly charges are high, not to mention the penalties you will incur if you are late with your payments. Debt trap, which is getting caught in an endless borrowing cycle, is also possible.
How do I qualify for an emergency loan?
- Decide on the amount you want to borrow.
- Check your credit score before applying.
- Research lenders that specialize in emergency personal loans both online and in person (more details below).
- Most lenders look for a good credit score, usually at 670 or above, for a larger loan.
- Applicants with lower scores can qualify for smaller loan amounts with higher interest rates.
How to compare emergency loan lenders?
Be careful when you compare emergency loan lenders because online search results will contain some of the short-term varieties of loans that we mentioned above. What you’re looking for is personal installment loans. Find lenders who offer those and compare the features below. Ask as many questions as you like until you feel comfortable.
Interest rates:
Interest rates vary, depending on the borrower’s credit score and the current prime rate. Rates are low right now. Expect them to go up in 2022.
Terms and conditions:
The terms and conditions outline the number of months you’ll have to pay the loan off and what the fixed monthly payment will be.
Available loan amounts:
Some lenders have minimum amounts you can borrow, and others have maximums for poor credit borrowers.
Origination and repayment fees:
There may be an origination fee to get the loan and there could be an early repayment fee if you want to pay it off early.
How to apply for an emergency loan?
Select your preferred lender, choose an amount, and fill out the application online or in person. You will need the following documentation in physical or digital format:
Valid State Driver’s
License or State ID
Proof of current
employment
(Paystubs)
Valid checking account
for direct debits
Most recent
W2 or 1099
The lender will also run a credit check. This will result in a “hard inquiry” on your credit report that might drop your credit score by a few points. The loan itself could also have this effect, but your score will go up again if you make all your monthly payments on time.
FAQs
When you have an emergency fund, you’re decreasing your chances of needing an emergency loan in the future. An emergency fund can cover any of those unplanned expenses instead of having to take out a loan.
The way you repay the emergency loan depends on what type of loan it is, but for most, it’s a type of installment loan. This means you make a payment of a certain amount in installments over a designated period of time until the loan is repaid.
Even if you don’t have a job or income, you can still get an emergency loan, though your options may be a little riskier and it’s not recommended to increase debt without a guaranteed way to repay it. Options can include a pawn shop loan or title loan.
Some types of emergency loans don’t require a credit check, such as a pawn shop loan or payday loan. Some online lenders may also offer personal loans with no or bad credit. However, keep in mind you’ll likely have very high APR and may be risking assets you must provide as collateral, so proceed with caution.
If you’re a veteran and need emergency funds, the best place to look is a credit union that caters specifically to veterans and military members, or a bank or online lender that has favorable rates and terms. When comparing emergency loans for veterans, consider possible discounts you’d be eligible for through the institution, while also comparing rates and fees.
The first step in getting an emergency loan online is to compare personal loans and lenders. If you can get prequalified for a more personalized estimate of APR and monthly payments, do so. You can then apply for the loan online, and get approved quickly. Once you accept the loan’s terms and conditions, you’ll receive the loan funds within a short period of time.
The actual amount you should have in an emergency fund depends on your lifestyle, monthly costs, income, dependents, and other factors, but experts recommend having at least three to six months’ worth of expenses in your emergency fund. The goal is to have enough saved so that if an emergency occurs, you don’t have to get an emergency loan and risk going into debt. There is no guarantee that you will qualify for an emergency loan should you need one, so having emergency savings set aside is crucial.