Should You Use A Personal Loan for An Emergency?
Emergencies are no respecters of person. Even the richest or the most socially prominent people get blindsided with something out of left field. Back in the day, people put aside a percentage of their paycheck to meet an emergency. Unfortunately, those days are long gone. Those suffering under an emergency may only have recourse to get a personal loan for an emergency.
What Constitutes An Emergency?
Your Car is Dead
You’re at work one day delivering food. Suddenly, your car stops dead in the road. The rods have been shot through your engine. Unfortunately, there’s no money for a new car. Until you can save it up for a new one or get an emergency repair loan to fix it, you’re going to be hoofing it. This sounds like an emergency to us. May we suggest a personal loan for an emergency?
You’re awakened in the middle of the night in agony. Your chest feels like an electric current is making its way around the chest cavity. This isn’t a bit like you’ve heard a heart attack feels like, but you’re pretty sure that’s what’s happening. You quietly dress, pack essentials, and call for an ambulance.
Yep, it’s a heart attack. You’re in hospital for a week. They’ve put a stent in your heart and are keeping an eye on you to make sure your body doesn’t reject it. This means you won’t have a paycheck that week, which means you can’t pay your rent or your bills. This is definitely an emergency, the may require an emergency personal installment loan. You can even get this kind of personal loan online.
You’ve been Evicted
A computer glitch at work scheduled you for two days, but you’re a full-time employee. Even your second job won’t be enough added to those two days to pay the rent and your bills. You’ve never been evicted before, but you’re afraid you might be this time. If the landlord won’t go for a payment plan, it would be a good idea to get a personal loan for an emergency.
No more Health Insurance
Your store was bought out by someone who inexplicably canceled everyone’s health insurance except for the managers. You need special medications to make sure your pregnancy doesn’t miscarry. Without the insurance, you can’t afford the medicine. You miscarry the baby. Now you need money with which to buy your asthma inhalers that the insurance formerly covered. Emergency personal installment loans for the win, Alex.
You’ve been on vacation for two weeks out of state. You come back home, pull in the drive, and notice something isn’t right. Didn’t there used to be a house here? What’s that pile of debris doing there? Why didn’t someone alert you that your house burned to the ground while you were gone?
Aside from the shock, which is staggering, you have to find a place to live, buy new clothes, get all your paperwork re-established, and start all over again. This definitely sounds like an emergency.
You’ve been assigned to open a new office in Baltimore. The office you work in now is located in Chicago. You’ll need to pack up, hire a moving company, figure out how to move the dog, and eat everything in the fridge and freezer. A house in Baltimore isn’t just going to materialize; you’ll need to go find one. You’ll need an emergency loan to pay for all of this.
Mother in Hospital
Your mother is in hospital for what her doctors assure you is the last time. You book a flight to her home and pack up. You’ll have to deal with the doctors, the funeral home, cemetery, and all the myriad things involved with death. All this while dealing with a broken heart. There’s no telling how long this will take, so you take a break from work.
The snag to that is that you’ll need to pay the rent and your bills during the time you’re taking care of your mother’s estate. This is the perfect time for a personal loan for an emergency
After years of working, playing, and just living life, your knees have declared bankruptcy. The god of knees is displeased with you. You can no longer work, taking a walk with your granddaughter is a thing of the past, you can’t work out, and life seems suddenly depressing. While you look online for something to do that will bring in a paycheck, you check out emergency personal loans up to 10k or more to cover the basics until you get a paycheck.
Everyone’s idea of an emergency is different. By definition, emergencies are unplanned, often devastating occurrences for which solutions are not readily available. Doesn’t it seem as if they always cost a lot of money? So let’s change our definition to one which simply requires a personal loan for an emergency to turn it into a blessing. Let’s talk about these emergency cash loans and how you might obtain one online.
What Are Emergency Cash Loans?
A mortgage is a loan for a house. You get an auto loan to buy a car. Student loans are another category altogether. A personal loan for an emergency isn’t anchored by anything. You sign the papers, receive your money, and do with it what you will.
Today’s financial industry has changed with the changing times. With peer to peer lending and lending clubs gaining so much ground, the financial industry has had to up its game. Even the big boys, meaning the banking industry and credit unions, offer emergency personal installment loans when you need cash immediately with terms that may match their competing brethren.
Is you credit sterling?
If your credit is sterling, you can apply to one of these these personal loans on their websites. Emergency cash loans could be in your checking account by at least end of the business day or first thing the following day.
Even if your credit is bad or could use a little help, the personal loan for an emergency industry has developed offers just for you. All you need is a good track record on your job, and you’re in. Bad credit doesn’t mean you’re a bad person, just that your finances have undergone some unfortunate changes. Emergency loans stores will work with you to find the loan that’s right for your circumstances.
To get a personal loan online for an emergency, be prepared to have your credit history scrutinized. Lenders need to know that you have a history of repaying loans. If your job is in good standing, and you have a good track record of credit, then you shouldn’t encounter any problems.
Benefits Of Personal Loans
Now that you know what personal loan for an emergency is, you should know their advantages for you:
- They’re personal. You can do with them what you will-open a home business, take a splashy vacation, buy a new wardrobe since your diet has been successful, buy a new car, consolidate your credit card debt, etc.
- They’re quick. Sign the papers, and it’s often only hours before the money is in your account.
- You won’t need a bank. Banks can often feel stuffy and forbidding. Emergency personal installment loans stores feel friendly, smiling, and definitely not stuffy.
- The repayment amount is fixed, the interest rate is fixed, and the repayment time for the loan is up to you (from two years to five.)
- You can borrow what you need and then some just for a cushion, from $500 up to $100,000.
- You’ll have a lower interest rate than you would using credit cards.
Types Of Personal Loan For An Emergency
There are many ways to get personal loan online or emergency cash loans:
- Home equity. This type of personal loan for an emergency uses the equity in your house as collateral. You get a lump sum in your account to use as you will.
- Home equity line of credit. This is a revolving amount you take out as you need it, and uses your home equity as collateral.
- Military payday loan. Available only to the military and secured by your next paycheck.
- Credit card advance. Monies advanced to you by your credit card company.
- No credit or bad credit personal loan. If your credit is less than perfect, you can get one of these secured by your signature.
- Emergency cash loans. Get personal loan online is often how these are done, secured by your signature.
To Qualify Or Not To Qualify
Emergency personal installment loans are called that due to the installment payments each month to repay the loan. If your credit is in good standing, you have a job, and your debts aren’t overwhelming, chances are good you’ll qualify for a personal loan online. If your credit isn’t good, you’ll pay more in interest, and you won’t be able to borrow as much.
Repaying emergency cash loans only goes on your credit report if the lender reports the payments each month. Consolidating your credit card debt (if you used your credit cards to pay for an emergency) decreases the use of your credit. It’s better to pay installments on a personal loan for an emergency. You won’t be repaying credit card interest rates, and your credit score will improve.
If you’re afraid you won’t be able to repay the personal loan for an emergency on time each month, it’s better not to take it out. You don’t want to mess up your credit that way. It would be easier to borrow the money from family or friends.
Banks And Credit Unions
When people need a loan, they automatically think “bank.” Generally speaking, most people don’t know what a credit union is. Banks and credit unions are both public entities bound by federal regulations and offering the same products. Only their administration is different.
Banks are for-profit entities, owned by shareholders. They like to boast of their low fees and interest rates added to their excellent customer service. They generally have branches everywhere as well as being online. It isn’t difficult to find a bank branch somewhere offering what you need.
Credit unions are not for-profit entities, owned by their members, also known as account holders. They also offer low fees and interest rates, so shop around. Credit unions are beginning to open branches in every neighborhood as well as being online. Both have enough apps to get you through whatever you need done. As an example, you can take a picture of a check, and it’s deposited into your account. No need to fight traffic to make a deposit.
It’s not difficult to join a credit union. If you or someone you love or if you have friends in a certain industry, church, school, or government job, then you can ask to be sponsored for membership. If you have none of the above, ask at a credit union for the requirements of membership. You might just qualify.
When it comes to loans, credit unions seem to have the advantage. Since they don’t have to generate profits for their shareholders, they can charge lower fees and interest rates. Even in their checking and savings accounts, they don’t charge handling fees, so getting loans should be simple.
It really comes down to you and your needs. If you want the convenience of online banking, nearby branches, and you don’t mind higher interest rates, then go with a bank. If the interest rates bother you, then go with a credit union. Basically, fees and interest rates are the most important differences between banks and credit unions.
Loans: Secured Or Unsecured?
Unsecured personal loans, or loans that have no collateral, are easier for most people to handle. They won’t lose their car or house, if they can’t repay the loan. If they go bankrupt, unsecured emergency personal loans are easily set aside.
Putting up your house, your car, your art collection, or something else of value, then you stand to lose more if you default on the loan. On the other hand, it’s easier to qualify due to the collateral. If the loan is to pay bills right after you lost your job, the collateral will look more attractive to a lender. Based on the collateral’s value, you should get more money and at a better interest rate.
Depending on the nature of the emergency for which you need a loan, think carefully before putting up something you can’t really afford to lose if you have to default on the loan.
Credit Card Advance Or Personal Loan
One of the sources of emergency loans is credit card advances. They have an advantage over personal loans in that the balance can be paid off every month. The interest rates may be higher, but you can get around that by paying the balance each month. Credit cards are for those who don’t need a large infusion of cash, but could use some in a hurry.
Personal loans, on the other hand, enjoy a fixed interest rate for the life of the loan. You can borrow as much as you need, if your credit is good. You get between two and five years to repay the loan. Personal loans are for those who need a large amount of money ASAP.
The Nitty-Gritty Of A Personal Loan For An Emergency
Okay, you know what an emergency is, what emergency personal loans are, you know their benefits, and you know the different types of loans. What’s going to happen when you apply online or stop by a personal loan office? You’ll fill out the paperwork first. Then you’ll need to clearly understand why you’re seeking a personal loan for an emergency. You’ll need to bring at least the last four, preferably six to eight, paycheck stubs with you. Bringing with you a bank statement of the last three months would be a good idea. The personal loan officer will pull your credit report.
Together, you will devise a statement of your expenses. The loan officer needs to know that you’ll have enough money left over after expenses to repay your loan. It’s called income to debt ratio. You’ll need a clear idea of how much money you need to borrow before you and the loan officer get down to the nitty-gritty.
Now that the financial work and the paperwork is done, you have to wait. You’ll hear within hours if the emergency cash loan will happen. You could have your money within 24 hours.
What To Look For In Seeking A Personal Loan Lender
We live in an age of fraud and scams. Unfortunately, when people are in dire need of money, they’ll snap at a legitimate-sounding offer. Only later do they find their identity has been stolen, or they’ve been fleeced of money they not only didn’t have, but desperately needed. Here are a few things to beware of:
- Payment fees. Lenders do have fees, but usually tied to the loan. They might say it’s an application fee, but don’t fall for it. Legitimate lenders don’t charge advance fees of any type.
Persona loans can come with fees, including:
- Application fees.
- Late payment fees.
- Origination fees.
- Prepayment fees.
- Wiring money. Why would you wire a lender money he’s supposed to be lending you? If anyone asks you to wire money to them, they’re very likely frauds. Don’t do it.
- Copycats. If you receive an “invitation” to borrow from a company, call its headquarters to make sure it’s a real company. Some scams set up a website and even brick and mortar premises that sound like a famous lender. This lulls you into believing they’re real. Double check first.
- Personal information. Never ever give anyone your social security number, birth date, banking information or anything else personal. Double check to make sure the “lender” is legitimate. Most lenders don’t ask for personal information until you’re doing the paperwork together.
- Guarantees. If any “lender” approaches you with guaranteed loan offers, keep on walking. No lender guarantees anything until the credit check, job and income information have been evaluated.
- Padding. Interest rates on a personal loan are based on credit rating, income, and ability to repay the loan. If a “lender” raises the interest rate by even one percentage point, you’ll be repaying more and for a longer period of time. The “lender” is padding his own account at your expense.
— Loanry.com | Loan Shop 🏪 (@LoanryStore) January 17, 2019
Life happens. Your house is destroyed by fire or storm, your car dies, you have to move across the country, and/or you can’t pay for your medications due to your insurance being canceled. We get it. Emergency loans were devised for when life happens to you.
Personal loans take many forms. They look like home equity loans, credit card cash advances, military loans, and loans for an emergency. There’s even a loan for those with bad or no credit. The financial industry is working hard to keep up with the times. Therefore, you can ask for a loan and receive reasonable terms from just about anybody in the industry.
Personal loans have many advantages. They’re quick, you can ask for as much money as you need, and you can take as long as you need to repay the loan. You can get them from a bank or a credit union. We understand how people might not want to chance a personal loan store or find a lender online. As we said, you can get a personal loan just about anywhere.
There’s just one thing you need to remember when you decide if a personal loan is right for you. There are millions of listings online that say personal loans. What you don’t know is that among all those millions of listings are companies that don’t lend. They talk to you to get a picture of your reasons for a loan and how much you need. Then they steer you toward the loan companies that may match your needs.
You won’t have to scroll through every one of those millions of sites looking for what you need. These people do the work for you. Read carefully in order to distinguish them from personal loan lenders. Let them help you find an emergency lender with your name on it today.
Myra has written in a range of styles encompassing white papers, finance blogs, credit product descriptions, how-to manage finance pieces, professional articles for lawyers, finance experts, web designers and more. She has written for an equally wide range of clients on the topics of loans, personal finance development, credit reports and scores, taxes and many more.
Myra worked in a bank as a young person and has dealt with payment processors in the past few years in her financial services endeavors. She therefore understands how the system works.