How to decide on emergency loans to get fast money

When the rent is due, you don't have time to wait for the government's grinding gears.

So could an emergency loan help?

If you're one of the 31.5% of unemployed Americans who say they couldn't last a month without the additional $ 600 a week from unemployment, your budget can't make up for unemployment loss without any help.

And while we recommend building an emergency fund, finding a bridge job, and cutting your budget, an emergency loan can be the lifeline you need to keep your head afloat until the next unemployment or incentive control arrives.

We'll break down loans that can get you into your hands quickly, including what you need to qualify, what type of interest rate you're facing, and what offers you should avoid.

How to get emergency loans

If it looks like the more you need it, the more difficult it is to get money, don't imagine things.

Lenders like to lend money to people who can pay it back – with interest. This is how they earn their money.

This is important when comparing emergency loans. The faster you need the money, the more you can expect interest and fees.

However, there is some information that (almost) all lenders need when applying:

  1. Your name and address (and possibly previous addresses if you recently moved).

  2. Proof of identity, e.g. B. a driver's license.

  3. Your date of birth and your social security number.

  4. Proof of income such as payslips and employment verification.

The latter could make you think that you are not eligible for a loan if you are unemployed. However, lenders will consider alternative forms of income such as social security benefits or maintenance payments.

However, you must also show that you have made timely payments in the past. Therefore, find out about your creditworthiness before applying for credit.

Before signing agreements, consider all options and calculate how a new loan payment fits into your budget.

Which emergency loan is right for you?

The average personal loan – which is actually all an emergency loan – was taken out in May at an interest rate of 9.50%. However, you can find online loan interest rates that fall below 6% and mortgage loan interest rates that rise above 300%. You will also notice differences in the repayment schedules and available loan amounts.

To help you navigate your options, we have listed different types of loans, depending on how quickly you can get the loan in general, how likely you are to be approved, and what interest rates you can expect. However, the specific conditions depend on your financial circumstances.

Here are some options for emergency loans based on your financial situation.

1. You have excellent credit: online banks

If you've never worked with an online bank before, you may be pleasantly surprised at how quickly they can move.

Since online banks are exclusively digital, they can approve a personal loan within minutes. Be sure to ask the lender how long it will take to pay off the loan.

Although some lenders can transfer funds to your account by the end of the day, most take at least a day or two to process the loan – and sometimes even seven days.

However, to qualify for the low interest rates that online banks advertise, you need a credit score of 600 or better.

The minimum loan amount is typically $ 1,000 to $ 2,000. So if you need a lot less, you might want to reconsider this option. If you borrow too much, you only pay back more interest.

2. You need a little more help: credit unions

Credit unions are member-owned nonprofits, which usually means that they offer lower fees and lower interest rates on loans compared to traditional, profit-oriented banks.

And if your creditworthiness is less than excellent or you need help navigating the loan application, the credit unions are small enough to offer personalized services. Loan officers can help you choose the cheapest loan option without forcing you to make high-profit products.

If you have been a loyal, longstanding member of a credit union, you may be able to accelerate your loan.

However, if you are a newer member or just become a member, you should expect the credit process to take longer – up to seven working days before you see money. Ask the branch about the schedule before submitting an application.

3. You need the money today: cash advances

If you already have a credit card, there is a good chance that your issuer will offer an advance.

And since you already have the card, you don't have to fill out or wait for applications. With most credit cards, you can get cash through a bank withdrawal or at an ATM.

However, this convenience comes with compromises, starting with a tight limit on access to money – expect around 25% of your credit limit.

There are also transaction fees and particularly high interest rates that are even higher than your regular credit card interest rate. These occur daily.

Per tip

Use your credit card directly instead of the prepayment option. You get the money at least at a lower interest rate – and without the fees, as long as your payee accepts plastic.

However, if you need cash tomorrow and can create a concrete repayment plan, a credit card advance can be a quick fix.

4. Your last resort? Anywhere except a predatory lender

Have you ever seen a natural show? Then you will understand why you want to stay away from a robbery loan because the predator is the lender and the prey … you are.

But we understand it: Robbery lenders make their business sound so tempting: no credit checks! No income! No problem!

Per tip

A sure sign of a predatory lender: they call you to offer you money without being asked. Legitimate lenders never "guarantee" that you will get a loan before you apply.

Only this bait prepares you for a trap that you can hardly escape. The three-digit interest rates and short repayment periods force you to take out more loans to cover the payments of the last.

These loans are also known as payday loans because they offer a cash infusion that can surprise you until your next paycheck.

For example, if you had to borrow $ 500 for two weeks, a predatory lender can charge you $ 20 for every $ 100 (limits vary from state to state). So in two weeks you would owe $ 600, provided there are no additional fees or penalties. Are you sure you will have an additional $ 600 in two weeks? If not, borrow again.

Once you're in this vicious circle, it's hard to escape.

So be careful if a lender goes through an application without asking your credit rating, pressuring you to take out a local loan, or not providing a full explanation of the fees and penalties. You're better off than sacrificing your financial future for a temporary cash inflow.

But you still need money to put food on the table and turn on the lights, don't you? If you cannot qualify for a quality loan, you may need to look for alternative emergency sources. You can start with these seven resources to meet the essential requirements until this exam is complete.

Tiffany Wendeln Connors is an associate and editor at The Penny Hoarder. Read her biography and other work here and then catch her on Twitter @TiffanyWendeln.

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