The risk of an emergency loan is that it may have strings attached to it. These “strings” may not bind you, but they may be a factor in altering your situation to better fit what the creditor prefers. Another risk of these loans is that you should be informed that the company issuing the loan has the right to take money from your paycheck if you don’t repay the loan promptly. However, nothing too risky about that; some people tend to become stressed in these situations and fall apart. Know what’s going on before you get yourself into the situation.
What Can I use an Emergency Loan For?
These are generally used to cover emergency expenses that cannot wait until the next payday. Examples of this include emergency medical expenses, car repairs, and so forth. One good thing about an emergency loan is that the loan is often paid off fairly quickly with your next paycheck.
Can I Get an Emergency Loan for my Small Business?
While you can get a cash advance for your business, this is not the same as an emergency loan. Cash advances may or may not be a good idea, depending on the terms. For instance, some companies have incredibly high fees for issuing these advanced payments. It’s generally advisable to avoid this type of loan for these reasons. If you’ve had an emergency come up and you don’t have enough money to cover the emergency expense, try getting a personal cash advance.
What Can I Use an Emergency Loan For?
Emergency loans may be used for medical expenses, car repairs, entertainment/vacations, and more. You should keep in mind that you may not qualify for an emergency loan if you have already used up your budget for the month. If you use the vehicle loan for a personal need, it is not being used as an emergency anymore, but as a luxury or non-daily expense.
Types of Emergency Loans
The types of emergency loans are as follows:
An unsecured loan means that the loan is not based on other assets such as a property or a vehicle. This is the riskiest loan because it generally has high-interest rates and may not allow you to decide how much money you want to borrow (also try to determine).
A bad credit payday loan – These are typically paid back fairly quickly, usually at your next payday. It’s possible to get these from small companies, but these may have high-interest rates.
Secured loan – This type of emergency loan is based on valuable assets you already own. For example, a car can be one of these types of assets. You won’t get any money unless you offer up the asset to the lender. These tend to have lower interest rates than unsecured loans (try to think whether they generally have higher or lower interest rates than unsecured loans). However, they need proper paperwork (documents) to be considered a valid emergency loan.
Credit card cash advance – A cash advance may be just what you’re looking for as an emergency loan if it’s done properly so that you don’t owe too much money in fees. The reason why it may seem so fancy is that the moment you sign on the dotted line, your balance with the credit card company is reduced by your cash advance amount (remember that you have no money coming in until payday). Try to make smart decisions about this – don’t abuse the privilege. Otherwise, it may not be available to you when you actually need it.
Line of credit – While not really an “emergency loan,” many people think of this type of loan as one because it has details similar to that of an emergency loan. With flexible payment options and interest rates popularly known as fair interest rates, line of credit loans can help those with shaky credit scores get into their own homes faster.
How To Choose An Emergency Loan
Are you going on vacation soon, and you need to pay for that flight? Or perhaps you are in dire need of a new television set, and the current one is not in your budget at all. Whatever the reason you may have for needing money, cash advance loans can be perfect for you. They are designed to give fast cash when it is needed most. Even though these loans can be tough to pay off in some cases – keep in mind that they will usually go away faster than other types of emergency loans (the important thing is to find out what’s available). They also have lower interest rates than most other forms of emergency loans, making them even easier to care for.
Emergency Loan Alternatives
If you have had issues with your credit score in the past, it may be difficult to get a traditional emergency loan. That is where an auto title loan comes into play. This type of loan is based on the vehicle that you own. If someone uses their motor vehicle or even a motorcycle to pay off this type of debt, it must be paid back – usually between one to two months. If you are missing the money to make these payments, you will have to forfeit the vehicle to be sold, and the auto title lender can garner the money. They use your vehicle as collateral, making it an extremely secure form of emergency lending for people who qualify (along with their car).
Risks of Emergency Loan
Some big risks can come with emergency loans – particularly the unsecured loan (one without collateral). Try to avoid these types of loans, especially if your credit score is low. With the secured type of emergency money, you may get bad credit because of the high-interest rate and fees; however, if you pay it back promptly, it will not be too bad at all. When you’re prepared to receive an emergency loan, don’t allow your credit history stop you from doing so. This is why it’s better to learn more about these kinds of loans before you decide whether they are the right ones for you or not. There are many options to choose from when searching for an emergency loan for those who qualify – whether it is a car title loan or an unsecured loan. Having trouble getting a traditional loan? This is your opportunity to take advantage of those funding options you never realized the public had available to them.
Benefits of Emergency Loan
If you need money – then you’ll want the emergency loan to fit your budget. With that said, if you have bad credit scores, it is going to make getting this loan very difficult on your part. Your credit score is one of the biggest factors determining whether or not you qualify for an emergency loan – so work on raising that score if yours is low or if you don’t have anything to back your application up.
How to apply for Emergency Loan
To apply for an emergency loan, you’ll want to make sure that you have all the documents you need to get your account going. You will need a checkbook, a home address with a computer good enough to get online, a valued picture of yourself, and your vehicle’s titles or registration if you’re applying for a car title loan. If you are applying for an unsecured loan, you will also have to answer several questions regarding your personal information, financial status, and prospects. And a loan from these local stores is usually fairly easy and simple to process your application. Be careful with your decision when getting an emergency loan. They can be used very easily, and before you know it, they can be out of control!
Understand how much money you can really afford to be taking out before making too many big purchases or putting yourself in terrible debt because of your inability to pay off the sum in time (or decide not to pay it back). Once you have decided on which emergency loan is for you, sign the paperwork and then wait for the money to arrive quickly. It will definitely come in handy when you need it most, but make sure that doesn’t happen anytime soon! These loans are only meant to be used when life gets very hard financially – not anytime soon after payday or before your next benefits check (if receiving government aid). Waiting until this type of problem exists before the funds are provided can set up serious problems later down the road. Make sure there are no pending payments first; this needs to be taken care of before looking at any other options so that you don’t become delinquent with any bills (no matter how small).
List of Documents to apply for Emergency Loan
The documents that had been received to apply for an emergency loan are:
- a driver’s license,
- address proof,
- your CVV number (you’ll find this on your credit card; it’s the 3 digits on the back of your card),
- birth certificate/passport,
- account statements
- business license.
These are just some examples of what you may need to provide – but make sure to check each specific store if you don’t know already. Ensure that everything is tidy and that you can keep all of your documents together, whether in a folder or envelope. It sometimes helps to have everything organized so that there will be nothing forgotten or overlooked. Another important thing is to make sure that there is enough room in your bank account for the money to go into; unfortunately, some banks do not display the available balance. And when applying for an emergency loan-be sure that there is some proof that can be easily provided to go along with the application so that they know that you didn’t just make up your vehicle’s information and pictures.