Key Takeaways
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With some types of emergency loans, you can have access to the money within one business day.
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Payday loans or car loans may be your only choice for an emergency loan if you don’t qualify based on your credit.
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Even if you’re in a hurry, be sure to compare each lender and loan option to ensure you get the best rate and terms for your credit situation.
Obtaining an emergency loan can be as simple as completing an online application, providing details about your salary and job, and adding banking information.
Emergency personal loans can give you quick cash to pay for the unexpected. It is a type of personal loan that borrowers can use for a crisis, such as medical bills or important home repairs. They are usually small and funded within days.
If you urgently need money but don’t have the money to pay for it, you are not alone. The 2024 Bankrate Emergency Savings report found that more than half of American adults (56 percent) would not pay for an emergency expense of $1,000 or more from their savings account.
Knowing how to get different types of emergency loans and comparing emergency loan rates may help you find the right loan if you’re in a pinch.
How to get an emergency loan
Stress can make it difficult to make an informed loan decision. You may have to deal with doctors in a hospital emergency or with insurance companies after a car accident.
Regardless of the circumstances, there are five steps you can take to help you choose the right emergency loan for you.
1. Determine if you need a quick emergency loan
Consider your timeline for needing cash. Situations that require quick cash include paying for a major car repair, a deductible to be admitted to urgent care, or a roof repair company in advance.
But you may have time to schedule your dental work or your insurance may cover a rental period while your car is being repaired. If you have at least a few days before you need money, it gives you time to shop around. You may find better rates and terms.
2. Compare loan types and lenders
Always compare the rates and conditions of at least three different companies. The right emergency lender depends on your financial situation and how quickly you need the money.
Types of emergency loans
There are different types of emergency loans available. Each has its pros and cons, and some may suit your situation and finances better than others.
If you need money to fund your emergency bills in a day or two, personal loans, payday loans, credit card cash advances, and title loans offer the fastest cash. Of those options, personal loans have the lowest costs and the fewest drawbacks.
If your monetary needs are not as time-sensitive, you may also consider a mortgage loan or HELOC.
Bank interest tip
Beware of predatory features like prepayment penalties, upfront fees, or high interest rates. Payday loan fees can translate into annual percentage rates (APRs) of more than 600 percent. If you feel pressured to accept a lender’s offer or you don’t understand the loan terms, find another lender.
3. Get prequalified
Most emergency lenders will prequalify you based on the information you provide them when you start shopping. The key to getting the best loan for you depends on several factors.
Credit score
Lenders use your credit score as a measure of risk for personal loans, home equity products and credit cards. If your credit score is below 669, you may need to look for loans offered by fair and bad lenders. If you have no credit history, you may have to settle for a payday or title loan.
If you opt for a personal loan, mortgage loan, or HELOC, you may see a temporary drop in your credit score due to a hard credit check. Consistent, on-time, and full payments can help improve your credit score.
But that’s only true if the lender reports to one or more of the three major credit bureaus. Payday and title lenders typically don’t do that.
Refund Terms
Choose the shortest repayment term you can comfortably afford so that a one-time emergency doesn’t turn into a long-term debt repayment. The faster you can pay off the balance, the less interest you will pay in the long term.
Payday loans typically require repayment within 14 days. The term of a mortgage loan can be up to 30 years. The terms of personal loans vary from one to seven years.
Interest rates
Interest rates on HELOC loans and home loans are typically lower than other emergency loans. Personal loan rates can be as low as 8 percent for borrowers with excellent credit and up to 36 percent for borrowers with bad credit.
The interest rates for payday and title loans are extremely high because the loans are usually not based on your creditworthiness. When shopping for an emergency loan, pay close attention to the APR. It includes both interest and fees. You can use the APR to calculate your payment and your total interest costs.
Bank interest tip
Choose an emergency loan that fits your budget. Consider a longer term if you’re already living paycheck to paycheck. You can usually pay off the balance faster if you have the extra money in the future.
4. Complete the application
Once you have chosen the best lender for emergency loans, you will need to apply and provide all necessary documents once approved. For a personal loan, you may need documents such as pay stubs, proof of address and your driver’s license.
A new HELOC or home loan may require the same documents you needed when you bought your home, including assets, tax returns and possibly even a home appraisal. Provide documents as soon as possible to receive your money in the shortest time possible.
5. Wait for a decision and financing
The time to get your decision and financing depends on the type of loan you take out. The money is usually deposited directly into your bank account, with automatic payments set up for future payments.
| Type of loan | Time for financing |
| Personal loan, payday loan, title loan | 1-7 working days |
| Credit card cash advance | Immediately |
| Mortgage Loan, HELOC | Up to 45 days |
Where you can get an emergency loan
A number of financial institutions offer emergency loans. Which one is right for you may vary depending on when, where and how your emergency occurs.
Online lenders
Taking out a personal emergency loan online is quite simple and requires you to fill in some personal details from the comfort of your home. Taking out your loan online also allows you to compare different loan options at once, and these may be available during hours when most banks are closed.
Online lenders offer fast financing. If you are in a precarious financial situation and need money as quickly as possible, an online lender is the best choice.
What to pay attention to
Scammers can pose as online lenders. Always check that a lender is legitimate and registered in your country. Make sure the lender’s website is also secure.
Payday lenders
You can find payday lenders online or in local shopping centers in most areas. The applications usually only require proof of employment and how often you get paid.
These loans come with APRs in the triple digits and high fees that can be difficult to understand. They should only be considered if you do not qualify for a personal loan with bad credit.
What to pay attention to
Many states restrict these types of loans. Often it hurts more people than it helps. If this no-credit loan is the only way you can afford an urgent expense, do everything possible to pay it off when it is due and look for other financing options if your circumstances are not so dire.
Auto title lenders
Like payday loans, car title loans do not require a credit check. You can receive the money quickly with basic information about your vehicle. However, these loans typically have extremely high interest rates and fees.
What to pay attention to
Before going this route, exhaust all other options, including borrowing money from friends or family. The high interest rates and short repayment terms on car loans increase the chance that you will not be able to repay. If you fail to do so, your car may be confiscated.
Banks
Your local bank may offer you an emergency loan at more competitive rates and better terms if you have a long-term relationship.
The most important advantage of borrowing from a bank is that you know from whom you are borrowing in a personal conversation. They can give you financial advice so that you do not have to borrow money for emergencies in the future.
What to pay attention to
If you have bad credit, banks may not be willing to lend you money. They usually have stricter credit requirements.
Credit unions
Like banks, credit unions usually offer you fair terms and interest rates on the money you borrow. They can also provide fast turnaround times for HELOCs and home loans.
Credit unions can be a better option than banks for people with less-than-perfect credit. They generally have more lenient credit and income requirements.
What to pay attention to
Like banks, financing terms can be longer than with online lenders. Additionally, you must be a member to sign up. Applying for a membership may delay access to the funds you need.
The bottom line
Obtaining an emergency loan can provide financial relief in times of crisis. You can take out a personal emergency loan in five easy steps. Think carefully about your options and compare lenders to ensure you get the best rates and terms. Only borrow what you need and make sure you have a repayment plan.
By taking these steps, you can be prepared for any unexpected costs and avoid falling into a debt cycle. If you’re not currently in a crisis, work on building an emergency fund so you don’t have to borrow when life happens.
