Unexpected financial emergencies can be a real pain, especially when you’re not prepared. A recent survey found that only 39% of Americans could afford a $1,000 surprise bill. That can be tough to deal with, especially when you don’t have the funds readily available. Some people resort to high-interest credit cards or borrowing from friends or relatives, but a good option could be personal loans for emergencies.
With a personal loan, you can get the cash you need quickly and easily. Most lenders have streamlined the application process so you can apply online and receive a decision quickly. Additionally, many personal loans come with flexible terms and monthly payments that won’t put too much strain on your budget.
Why get personal loans for emergencies
There are many benefits to taking out a personal loan in times of emergency. They are far more affordable than payday loans and credit cards, which often have sky-high interest rates and exorbitant fees. They also offer more flexibility, so you can use them for a variety of expenses. Whether your basement floods or you lose your job and need cash to cover bills, an emergency loan can be a real lifesaver.
Speed
You never know what unexpected expenses will come up. Sometimes you need to pay for them right away. For example, imagine your car engine breaking suddenly. You’ll want to get it fixed as soon as possible since you rely on your car to get around.
Fortunately, depending on the lender, you can apply for a personal loan quickly and easily online. Some lenders may even give you an instant decision. And upon approval, you could get the money that same day, within 24 hours, or in a few days.
Low-interest rates
Loans for emergencies tend to have low-interest rates, making them a more attractive option than other types of credit. Your credit score will affect the interest rate you’re able to secure, with higher scores resulting in lower rates. This can save you a significant amount of money on the overall cost of the loan.
Even if your credit isn’t perfect, there are still options available to you. Many online lenders are more lenient in their requirements than traditional financial institutions, and may also consider factors such as your income and employment history. This makes it easier to get approved for a loan, although the interest rate may be higher than for someone with excellent credit.
Flexibility
There are many benefits to taking out a personal loan with flexible repayment terms. Most lenders offer loan terms between one and five years, which can be very advantageous for borrowers.
For example, you’ll likely get an affordable monthly payment that works for your budget. And because the interest is already factored into the monthly payment when you take out the loan, you won’t end up paying a fortune in interest like you would with a credit card.
Where can I get emergency loans?
There are a few different types of loans you can get when you’re in a bind and need some extra cash. Here’s a quick rundown of each option so you can decide which is best for you.
- Credit unions: It’s easy to get a loan from a credit union – even with fair or poor credit. The only requirement is that you must be a member of the union.
- Banks: Applying for an emergency loan from a bank can be difficult, especially when you have bad credit or low income. You may not get the funds as quickly as you need them, which can be frustrating in an emergency.
- Online lenders: There are many benefits to applying for a loan from an online lender. You can usually get your money more quickly than from a traditional bank, and most will allow you to prequalify so you can see what kind of loan terms and rates you could qualify for before you even apply. This can help save your credit score from taking a hit from a hard credit check.
What can I use emergency loans for?
There are many reasons why someone might need to take out an emergency loan. Some common reasons include:
- Medical bills: An emergency loan can help cover the out-of-pocket costs of an emergency room visit, for example. Depending on your insurance policy, out-of-pocket healthcare costs may be a significant portion of the total cost of your service. By taking out an emergency loan, you can avoid having to pay these costs all at once.
- Car repairs: At some point, every car will need repairs, whether it’s a simple fix like new brakes or something more complex like a new transmission. According to AAA, regular repair costs can range from $500 to $600 or more. An emergency loan can help cover the costs of these unexpected repairs.
- Home repairs: As homeowners, we are constantly faced with repairs and maintenance issues. From leaky faucets to broken furnaces, these problems can quickly become expensive. Fortunately, there are emergency loans available to help us keep our homes in optimal shape. With the cost of home repairs ranging from $3,954 to $20,260, these loans can be a lifesaver.
- Everyday bills: Losing your job, having your hours cut, or being unable to work can be incredibly stressful. Not only do you have to worry about how you’re going to make ends meet, but you may also have to take out an emergency loan to cover your expenses. This can be a daunting prospect, especially when you consider that the average American family spends $1,889 per month on household bills.
The bottom line
Every so often, life throws us a curveball and we have to come up with the money for things we hadn’t planned on. That’s where personal loans come into play. They can help us cover unexpected expenses without any hassle. So next time you’re caught off guard, consider taking out a personal loan to help you get by.
