As the name suggests, emergency personal loans are taken for emergency use. Emergency loans are a good option for the people who need immediate cash for emergency purposes. They are usually used to pay for medical bills and other unexpected expenses. Additionally, if you are someone who has struggled to save money in your emergency fund and are faced with unexpected bills or expenses then emergency loans can be your saving grace.
When you are in a rush for money, loans over the phone can be really handy. Online lenders often approve loan requests and transfer the funds within 24 hours. But when is an appropriate time to take an emergency loan and what should you keep in mind before applying for one? We will help you understand how emergency loans work and if they would be appropriate for your situation.
What is an emergency loan?
An emergency loan is an unsecured, personal loan that can be used for unforeseen circumstances. You can use the money for bills, repairs, your education or business that requires funds. Emergency loans can come in different forms; personal loans, payday loans, and credit card cash advances to name a few.
Why should you take out an emergency loan?
Here are some advantages you will get if you take out an emergency loan-
- Quick cash
Emergency loans are generally requested by people who need that money immediately. Hence, most lenders process the applications quickly and transfer the funds as soon as possible. Most lenders will transfer the money to your account within 24-48 hours. They also tend to have a more relaxed application process and eligibility criteria too.
- Pay off medical bills
If you or anyone in your family was unexpectedly hospitalized and you are short on cash, emergency loans can be helpful. Since emergency personal loans are intended for emergencies, you can use them with the best interest as compared to other types of loans. However, note that not all lenders will offer generous terms for interest & penalties. Emergency personal loans are quicker to release and in loans, fast money usually means higher interest rates.
- Easy to repay
Besides an easy releasing process, emergency loans are also convenient to repay. More often than not, people who take out this loan don’t request big amounts of money. Emergency loans are similar to personal or salary loans where the amount is same as the borrower’s monthly budget. If you plan to borrow a small amount of money for an emergency, emergency loans are a good option.
- No collateral required
Emergency loans are supposed to help people with their financial crisis temporarily. Most lenders don’t ask for collateral as these are unsecured loans. If the borrower has a good credit record, they may even be offered low interest rates.
- Easy application process
Besides the quick releasing process, the application is relatively easy & simple. As there’s no collateral, you don’t have to submit any paperwork related to your property. This also means that you will only need to submit the basic paperwork; proof of identity, income proof, proof of address, and other paperwork involved in all kinds of loans. After submitting these documents, your application will be processed and approved quickly.
It’s impossible to predict emergencies and emergency funds might not always be sufficient. If you are in a tight spot and need cash quickly, you can check out emergency loans. As they are unsecured, not a lot of paperwork is involved and most lenders understand that the borrowers are in need of cash quickly and hence release the funds pretty quickly. Make sure you shop around to find lenders who offer the best terms and conditions.
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