An emergency loan is an unsecured personal loan that can help cover unexpected expenses when you don’t have a financial cushion or can’t come up with the cash on your own right away. While there are different forms of emergency loans (e.g., payday, pawn shop, auto title, or high-rate installment loans), an unsecured personal loan for emergencies is often a better option as it can offer lower interest rates, fast funding, and affordable monthly payments made over a set period of time. Eligibility is based on your creditworthiness and no collateral is required.
Emergency loans often offer flexibility, allowing you to use the money to address a variety of emergency expenses, and use the funds to help pay for more than one emergency:
If you’re taking out a personal loan for emergencies, you can often begin by checking your rate online with a lender who pre-qualifies you using a soft credit check. This allows you to see if you’re likely to get approved and review your loan offers without impacting your credit score.
If you select an offer and continue applying for a loan, this usually results in a “hard pull,” or inquiry on your credit report. The lender will review your application, credit history, and debt-to-income ratio and you may be asked to provide supporting documentation like a pay stub. If you meet the qualification limits, the lender will approve your loan and provide you with a disclosure. Be sure to read everything carefully before you sign. Even in an emergency, you should know your terms, rates, and fees before you enter into a loan agreement. Once you sign, funds can typically be deposited into your account within a few days.