How to compare emergency loans
You can often apply for personal loans through credit unions, traditional banks and online lending platforms. This allows you to do so quickly and easily without the need to go to a branch. These lenders often offer flexible repayment terms and competitive interest rates, so you don’t have to compare emergency loans speed for cost.
These are some tips to consider when comparing personal loans.
- Prequalify whenever possible. Personal loan providers often offer prequalification for loan applicants. The applicant will need to provide details about their financial situation, income, and other pertinent information in order to determine what loan amount, interest rates, and repayment terms are most likely to be approved. This process doesn’t require a hard credit inquiry, so you can shop around and not harm your credit score. Prequalification can help you save time and avoid lenders that have more stringent requirements if you are looking for loan funds fast.
- Think about the purpose of your loan. Personal loans are not available for consumer debt consolidation. They can only be used to pay large expenses, such as vacations, weddings and funerals. Lenders often limit personal loans to postsecondary education, business purposes, and illegal activities. When considering a lender, confirm that your intended use is permissible under its borrower agreement–especially if you’re on a tight timeline and need money fast.
- Be aware of additional fees. There are some lenders that offer personal loans without fees. These personal loans don’t have to be paid origination fees, late payments fees, or penalties. This is not the norm, however, so make sure to inquire about fees when looking for the best loan terms. You may have to pay more fees to be approved for fast funding from a lender. You should find out whether the origination fee is included in the APR or deducted from the loan amount before funding. This could impact the amount of loan you are able to request.
- Review the customer service options of the lender before you sign the loan agreement. Although it may not seem important during the honeymoon phase, customer support can be a significant factor if you have problems with your payments or are facing financial hardship. To ensure that the lender is a good fit, review their customer service resources as well as reviews from current and past borrowers.
Based on 13 data points, we evaluated 15 lenders. These included loan details, loan costs and eligibility, accessibility, customer experience, and application process. Based on how each category was weighted, we chose the top 10 lenders.
- Applying for a job: 30%
- Accessibility and eligibility: 25%
- Loan details: 20%
- Cost of a loan: 15%
- Customer experience: 10%
We also looked at the available loan amounts, repayment terms and fees for each category. We also considered minimum credit scores, co-signer and joint application acceptances, as well as geographic availability. We also evaluated the customer support tools and borrower perks offered by each provider. These include prequalification options, mobile apps, and other features that can simplify the borrowing process. We awarded partial points to lenders that met each criteria where appropriate.
What are emergency loans and how do they work?
Unsecured personal loans are the most popular emergency loan. These loans can be used to pay unexpected expenses. These loans are quick and deposits can be made within days of approval. Some lenders will even fund loans the same day that you apply.
You won’t be required to provide collateral as emergency loans are usually unsecured. Some lenders will require borrowers to have assets, such as home equity or savings account funds, in order to borrow the money. Although you can also get emergency loans via payday loans or credit card advances, we recommend that you avoid these options whenever possible.
Lender standards for personal loans vary, so it’s important to assess each case individually. Consider how much you can borrow, the fees, minimum credit score, and income requirements when comparing lenders.
Types of emergency loans
You can get emergency loans in many forms including
- Personal loans. An unsecured personal loan can be obtained. This will use your credit history and credit score to determine eligibility, the interest rate, and the amount that you can borrow. Secured personal loans can also be offered by lenders that are secured with personal assets such as cars, investments, and real estate.
- Payday Loans. These loans are low-interest, low-amount loans. These loans don’t usually require credit checks but they have fast turnaround times and must be repaid by the next payday. These loans usually cost $500 or less, and can have fees as high as 400%. We recommend that you avoid this option if possible.
- Title loans. When you give over your vehicle’s title, such as your car, for cash, a title loan is what you do. Your lender may keep your vehicle if you fail to repay the loan.
- Credit card advances. You can borrow money from your credit balance if you have a card. You can expect higher interest rates on credit card cash advances than regular purchases. There are also fees (for example, transaction and processing charges). The interest rate starts accruing as soon as you take out money. There is no grace period. It will also increase the amount you have to repay.