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Key takeaways
- Emergency same day loans can help cover unexpected expenses. Many of these loans are available for consumers with bad credit.
- Explore alternative financing options. Borrowing from friends and family, paycheck advances, and buy now, pay later apps can be more flexible and less costly solutions.
- Prequalify and compare loan offers before you apply. Consider the terms, fees, and interest rate to ensure you get the best possible deal.
Getting emergency cash immediately can be tough. If you don’t have sufficient savings or an emergency fund, you may have to turn to loans or a credit card to cover the expenses. Bad credit can make it much harder to borrow money quickly.
You may be tempted by fast cash loans no matter their cost, but think twice before you sign on for a high-cost short-term loan. You do have other loan options, even with a low score.
We’ll go over how you can get emergency loans when you need them most, no matter your credit history.
What is an emergency loan?
An emergency loan is a personal loan that gives you fast cash to cover any unexpected expenses like medical bills, sudden car repairs, or immediate travel needs. These loans are typically funded within a day or two of approval.
Emergency loans come in various forms, including installment loans, payday loans, credit card cash advances, pawnshop loans, and car title loans, each with its own set of terms, interest rates, and eligibility requirements. Many are unsecured loans meaning the lender uses your financial information namely your credit score, income, and other debts to decide if they’ll offer you an emergency loan and at what rate.
A lot of emergency loans are installment loans, meaning you receive the money in a lump sum and make fixed monthly payments over a set period. Loan repayment terms often last from two to seven years and the interest rate does not change. Reputable lenders will report your payment history to all three major credit bureaus so timely payments can improve your credit score while late ones will hurt it.
The primary advantage of emergency loans is that they can give you cash in a pinch no matter your credit score.
Payday loans and payday advances
Payday loans or payday advances are an easy way to get emergency cash immediately especially if you have a less-than-ideal credit history. They are short-term emergency cash loans for horrible credit that give you a small amount instantly – usually up to $500 – without a credit check. These loans are typically due on your next pay date.
If you have insufficient funds to repay the loan on your next payday, you can roll it over – if your state allows. Rolling over a payday loan means that the lender will add additional fees and reschedule the payment to your next pay date. Be careful since multiple rollovers can lead to a cycle of debt where you have to take out new loans in order to pay for old ones.
A payday loan is characterized by its very high fees and interest rates. Many have fees equivalent to interest rates 400%. For instance, if you take out a $500 payday loan with a lending fee of $75, that equates to an APR of almost 400%. This can make repayment challenging, particularly for those already in precarious financial situations.
Payday loans provide quick cash, often within a matter of hours, making them an attractive option if you need cash instantly and can’t access credit from traditional lenders. However, it’s crucial to consider the long-term implications of taking on such debt and to explore all other loan options before resorting to payday loans.
Why might you need emergency loans?
There are plenty of reasons why you may need to take out an emergency loan.
A few top ones include:
- Medical expenses
- Dental bills
- Unexpected home repairs
- Car repair
- Cover expenses after job loss
- Natural disasters
- Legal fees
- Family Crisis
- Unexpected travel expenses
- Pay bills to avoid penalties
Life is unpredictable and when you don’t have a savings account, emergency cash loans may be the only way to go. The money will typically hit your bank account within 24 hours, even if you don’t have good credit.
Emergency loans are meant to be a temporary solution. If you find that you are in need of extra cash regularly, you need to figure out how to cut expenses or take in additional income. Personal loans will only exacerbate your financial situation if you relay on them.
Emergency loan rates, fees and terms
When exploring options for emergency loans it’s crucial to understand their interest rates, fees, and terms. The total cost of the loan will vary depending on your credit score and other factors. Emergency loans for less-than-ideal credit scores exist but you will find higher interest rates, additional fees, and less flexible loan terms.
Interest rates for emergency cash loans for low scores can be significantly higher compared to traditional loans, reflecting the increased risk for the lender. APRs for personal loans range from 6% to 36%. When you have bad credit, you can count on your APR being closer to 36%.
Emergency cash loan amounts vary from as low as $100 all the way up to $100,000. The loan amount you are offered depends on your credit score, income, and debt-to-income ratio. Lenders want to be sure you can afford to repay what you borrow.
Moreover, emergency loans may include additional fees, such as origination fees, late payment penalties, and prepayment charges, which can add to the overall cost of borrowing. It’s essential to read the fine print and understand all associated costs before you sign for a loan.
The repayment term you will receive depends on the type of personal loan you apply for. Installment loans come with terms of two to seven years. Shorter repayment periods typically mean higher monthly payments but lower overall interest. Longer terms spread out the cost resulting in lower monthly payments and higher total interest charges. A payday loan, pawnshop loan, or car title loan will have much shorter repayment term. Choose a personal loan with a repayment term that fits your budget.
How can I get emergency money with bad credit fast?
If you’re in a financial jam and you have a low credit score – anything below 630 counts as a bad credit score -you do have options. There are emergency loans for poor credit. Quick options for bad credit borrowers include payday loans, car title loans, and pawnshop loans. These short-term loans can be very expensive and are best to be avoided whenever possible.
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To increase your chances of getting an emergency loan follow these steps and strategies.
- Check your credit: Most lenders have credit score requirements. Know what your score is so you don’t waste your time applying for loans you are not qualified for. Check your credit report and correct any errors that could be damaging your score. The higher your score, the more likely you are to be approved for the loan you want.
- Decide what you can afford: Review your monthly budget and see what you can realistically put towards loan payments. It’s best not to borrow money you cannot afford to repay.
- Find a co-applicant: A co-signer or co-borrower with good credit and a steady income will increase your chances of qualifying for a personal loan with a low rate and good terms. It’s a big favor to ask since your co-applicant is also on the hook for the money and will be required to repay the loan if you fail to do so by the due date.
- Add collateral: Some lenders offer secured loans that are easier to qualify for. You will most likely receive better rates and terms, and possibly a larger loan amount. A secured loan requires you to put up collateral like a vehicle or property. If you default, the lender can seize your property to recoup their money. You might get better rates but ensure you can repay the loan before you go this route.
- Put down all income sources: How much you make each month is important since the lender wants to be sure you can afford payments on top of your existing expenses. The good news is many consider Social Security, alimony, and child support as income. List all sources of income on your loan application.
- Visit your local credit union: Many federal credit unions offer emergency loans that come with lower than average APRs even if you have a low credit score. The catch is you have to be a member of the credit union to apply for these loans.
- Prequalify and compare offers: Most lenders let you prequalify without hurting your credit score. Then you can compare loan offers and find the best deal for you.
- Gather paperwork: Get everything you need ready before you start the loan application process to make it go smoother. You’ll likely need a W-2, pay stubs, bank account details, government-issued ID, and proof of address.
- Apply for best offer: Choose the loan you prequalified for that gave you the best deal, then apply. Many reputable lenders will send the cash to your checking account in one business day.
A low score doesn’t automatically disqualify you from getting a personal loan, it’s just a little trickier to get urgent loans for bad credit.
Need a loan but don’t have a job?
Compare emergency loans
Even when you need money desperately, it’s important to compare offers. Never settle for the first loan you’re given. Luckily, a lot of lenders let you prequalify in minutes so it won’t take that much extra time. When you have all your loan offers, take the time to compare them.
Monthly Payments: Review your budget and determine if you have the cash flow to cover the loan payments. It’s not worth taking out a loan you cannot afford to repay.
Interest Rate: Find the loan with the lowest total interest cost. Compare the APR and the repayment terms. Long repayment terms with low monthly payments can be appealing but they tend to cost more in total interest. Short repayment terms with high monthly payments can be tough to manage but they’ll often cost less in total interest. Find a loan that offers a balance of affordable monthly payments and reasonable interest costs.
Fees: Emergency loans, especially for low scores, come with additional fees. The most common fee is an origination fee. It will be 1% to 10% of the total amount. Another one is a prepayment penalty when the lender charges extra if you pay the loan off early. Avoid these fees if possible.
Loan amount: Choose the loan that gives you sufficient cash to cover the unexpected expense. It’s best practice to only borrow what you need and no more so that the loan is easier to repay.
How fast you will get your money: Lots of lenders offer same day loans. Check and see what your lender provides. Others may take up to a week to send you the money after you’re approved.
Repayment plan: Always know how you will pay back the money before you take out a loan. Otherwise you may not be able to pay the loan back in full by the due date.
Emergency loan alternatives
The best thing you can do is save a little bit of money each month in an emergency fund. That way when you need quick cash you have it. But that’s not always possible.
Other options that may help in an emergency situation include selling unneeded items for fast cash, asking your creditor for an extension on your bill or to waive fees, using your credit card to cover expenses (not ideal), or exploring local community assistance programs that offer financial aid.
Alternatives to emergency loans that give you cash (or close to it) with potentially lower costs include loans from friends or family, paycheck advances, and buy now, pay later apps.
Friend or family loan
A friend or family member can be a fast source of funds when you need cash ASAP. The trick is to handle these loans with great care to avoid damaging personal relationships. Be transparent about your financial situation and do not borrow more than you can realistically afford to repay. If you run into any problems, communicate them immediately so that they can be addressed without any hard feelings.
Always draw up a loan agreement. Include how and when the money will be repaid and if there are any interest charges. Loans from friends and family typically are more flexible, do not include a credit check, and rarely come with interest and fees but they need to be handled with the same seriousness as any other loan.
Paycheck advance
If you need emergency cash immediately you can ask your employer for an advance of part or all of your paycheck. Many employers offer this benefit, allowing employees to receive a portion of their next paycheck early. This option can be particularly helpful for covering urgent expenses without the need for external loans. It’s interest-free but remember, your next paycheck will be reduced by the amount advanced.
You can also use a cash advance app like EarnIn or Brigit to get money quickly. These apps have low to no mandatory fees, no hard credit check, no interest, and allow you to access your own money early. It’s a quick and convenient way to get cash. You link your bank account or debit card to the app and provide them with basic financial details so they can determine how much to advance you. Cash advance apps typically approve loans and deposit cash within a few hours. You will have to repay the advance from your checking account on your next payday.
Buy now, pay later
The Buy Now, Pay Later (BNPL) apps are a popular way to make large purchases since they spread out the cost. While not a direct cash loan, BNPL apps can alleviate financial pressure by allowing you to defer payments for essentials or unexpected expenses without accruing interest charges. Be mindful of the terms and conditions, as missed payments can lead to fees and impact your credit score. As it is a loan, it is a good idea to only make one BNPL purchase at a time and pay it off in full before you make another one.
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Bottom Line
There are emergency loans for bad credit when you’re in a financial pinch. No matter your situation, you have options. Check your credit score, see if you want to add a co-signer, and gather your documents so that you’re ready to apply.
Online lending networks like MoneyMutual are a good resource for emergency loans. They let you prequalify with multiple lenders in a matter of minutes so you can compare offers without additional applications. Many even specialize in lending to borrowers with less-than-perfect credit and enable you to receive funds in as little as 24 hours.
When you need an emergency loan, don’t despair. MoneyFor can help you find the right loans for you.
