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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Bankrate’s latest found that 51 percent of Americans don’t have enough money saved to cover three months worth of expenses. The same survey found that 1 in 4 respondents don’t have any emergency savings at all, leaving them financially vulnerable in the event of an unexpected job loss or medical bill. One option for those with insufficient rainy day savings is an . This funding alternative covers your expenses in case of a large, unforeseen expense. There are a few kinds of emergency loans, but they almost always come with very short terms (usually weeks or months) and high interest rates and fees. While you should try to plan your finances so that you have an for unexpected costs, that may not always be possible. Sometimes emergencies come up when you least expect them, and an emergency loan might be the only thing available to fend off an even bigger problem. Why might you need an emergency loan
An emergency loan usually comes with a short term, sometimes as little as a week or two. They’re also generally offered to people with less-than-perfect credit. The combination of those two factors means that an emergency loan usually has very high interest rates and fees. If you can, it’s a good idea to into an emergency fund before you have an emergency. But if you’re in a tight situation and don’t have an emergency fund, there’s not much you can do about it at that moment. Some situations that might require an emergency loan include: Your car breaks down, and if it doesn’t get fixed, you won’t be able to get to your job. Your utilities (gas, electric and water) are in danger of being shut off. There is a problem with your paycheck and you aren’t getting paid when you expected. Types of emergency loans
An emergency loan does not have a strict definition; it’s a catchall for short-term loans that are meant to be used only in emergencies. Here are a few types of loans that could be considered emergency loans. Personal loans
A is an unsecured loan that allows you access to a fixed amount of cash without any collateral. You then pay it back in fixed monthly installments over the course of the loan term. Unlike many other types of emergency loans, personal loans usually have terms of a few months to several years. You can generally use a personal loan for nearly anything you want, which can make it useful for an array of emergencies. Credit card cash advances
In most cases, you use a credit card to make payments directly to a merchant. While that is useful for making purchases at places that accept credit cards, it doesn’t help you if you need actual cash. In that case, you can get a . Be aware though that many credit cards charge fees for cash advances AND the interest starts accumulating as soon as you get your cash, even before your next statement. Payday loans
A is an emergency loan with a very short term, usually only a week or two. Payday lenders typically market their loans as being available even if you have bad credit. Payday lenders will give you money now with the promise that you will repay them with your next paycheck. These loans typically come with outrageous interest rates (up to 400 percent) and should be avoided at all costs. Car title loan
A is similar to a payday loan, but instead of being unsecured, it is secured by the title to your car or other vehicle. Using your vehicle as collateral can help reduce the fees and interest you pay since the loan is secured. The downside of a car title loan is that if you don’t pay the loan, you may lose your vehicle. This is an incredible risk and should be avoided unless there are no other options. How to get an emergency loan
The first thing to do to get an emergency loan is to decide what kind of loan you’re looking for. Depending on your credit score and financial situation, you might consider a personal loan. Different personal loan lenders offer loans to people with all types of credit scores. Interest rates and fees will vary based on your credit profile and the amount of money you’re looking for. Many loans can be funded in as little as a few days. Here’s how to get an emergency loan from a personal loan lender: Gather your documents: You’ll generally need items such as your identification, Social Security number and proof of income and employment. Compare lenders: When evaluating lenders, consider funding times and compare rate quotes by prequalifying, which shows you what you could qualify for before you submit an application. Also, read reviews from both past and current customers to get a feel for the lender’s reputation. Fill out the application: Many lenders have quick online applications and give approval decisions on the same day you apply. Emergency loan alternatives
Here are a couple alternatives to an emergency loan that you might consider: Borrowing from the equity in your home: A or a is a loan backed by the equity in your home. usually take a few weeks to set up, so they’re best for access to funds in the longer term. Using a credit card: If the emergency situation you have can be paid for with a , that could be a faster alternative to an emergency loan. Asking friends and family: If you have friends or family with sufficient funds, they may be able to help you out. Set clear expectations about how the money will be repaid, or you may damage your relationship. How to determine if you need an emergency loan or can wait
As its name suggests, an emergency loan is meant for expenses that can’t be pushed back or rescheduled for a later time. If you have insufficient emergency savings and need to fill the gap with a loan — or don’t have savings to draw on at all — an emergency loan might be the only viable solution. Only you can decide whether an emergency loan is right for your situation. Some considerations to make when weighing this decision are: Is the expense urgent? In other words, ask yourself if it’s so time-sensitive that delaying the expense to save up the money isn’t realistic. Is the expense important? The expense should also be important. For example, although a department store holiday sale might be a time-sensitive event, buying discounted holiday gifts likely isn’t important enough to take out an emergency loan. Can you afford the loan’s monthly payment? Take into account the monthly principal amount, interest charges, and fees, and compare this amount against your existing budget. If the scenario you’re facing doesn’t check off these three questions, you might want to hold off on getting an emergency loan. Instead, consider building up your savings fund or going through an alternative option. Where to get an emergency loan
There’s no shortage of emergency loan options to choose from. Here are some lenders that can assist with a personal loan when you’re in a financial bind. These options were selected based on fast time for approval and funding. Lender Time to approval Time to funding Loan amount Credit score requirement Same-day approval As soon as one business day $2,000 – $35,000 580 Same-day approval As soon as one business day $2,000 – $50,000 600 Same-day approval As soon as one day $1,000 – $50,000 560 Same-day approval As soon as one business day $1,000 – $50,000 Not specified The bottom line
An emergency loan is a catchall for a loan that is targeted to people experiencing short-term financial emergencies. Emergency loans often have very short terms and high interest rates and fees because lenders know that if you’re in an emergency, you may not have a lot of options. Try to arrange your finances before you experience an emergency so that you’re prepared. Starting an emergency fund is a great way to put yourself on the road to a solid financial future. Learn more
SHARE: Dan Miller is a former contributing writer for Bankrate. Dan covered loans, home equity and debt management in his work. Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information. Related Articles