A Quick Guide on Getting an Emergency Loan

A Quick Guide on Getting an Emergency Loan

Individuals must use credit wisely to protect their financial situation. However, a person might find they have a considerable emergency expense that exceeds the amount they have set aside for these situations. When this happens, they look for an emergency loan to cover the difference. Where should they get this loan?

Personal Loans

Personal loans serve as a good option for those who need cash fast. They come with few, if any, restrictions. However, the terms of these loans vary by lender, and the borrower must know what they are agreeing to before signing for the loan.

Furthermore, the approval and loan terms remain highly dependent on the borrower’s credit score. Some lenders provide the funds quickly, sometimes the same day, but other personal loans may come with a waiting period of several days. This may not help if the borrower needs the funds right away. Additionally, these loans can come with a steep interest rate. This depends on the lender and the borrower’s credit score.

Credit Card Cash Advance

Individuals who have a credit card may benefit from a credit card cash advance. They visit an ATM or bank branch and use the four-digit PIN associated with the account to withdraw cash. The advance comes with an APR that is higher than seen with credit card purchases. Moreover, there’s no grace period with a cash advance. Interest accrues right away.

Credit card issuers charge a fee for the cash advance, which may increase the transaction cost by five percent or more. The borrower could pay on the advance and the associated fees for years to come.

Another drawback to credit card cash advances involves the amount the borrower can get. Most card issuers set the cash advance limit lower than the holder’s credit limit for the card. The amount available for a cash advance appears on each statement, or the borrower may call the issuer to learn this amount.

Payday Loans

If a borrower only needs a small amount of money, a payday loan might be the best solution. The borrower may use the funds for any purpose, but they come with a short repayment period. Men and women appreciate being able to apply for these loans online or in person, and the funds typically arrive in their bank account within a few hours or days of the loan acceptance.

Individuals find it very easy to qualify for this type of loan. The credit requirements remain more lax than seen with conventional loans. In fact, some lenders don’t conduct a hard credit inquiry, allowing more people to qualify for funds.

Exorbitant interest rates remain the key drawback with payday loans. They come with an average annual percentage rate of 400 percent, and the borrower must repay the loan within a matter of weeks. This leaves the borrower little time to handle the current financial emergency and repay the funds.

Getting an Emergency Loan

People often panic when they experience a financial emergency. They rush to find the fastest solution to the problem. As a result, they end up making a difficult situation worse. Before applying for an emergency loan, borrowers need to take certain steps.

Credit Score

Know your credit score, as this plays a role in which solution is right for your needs. A person with a fair credit score will find they get a decent interest rate and favorable loan terms with personal loans. For those with a poor credit score, it never hurts to shop for a personal loan, as a lender might be willing to work with you.

Compare Lenders

Lenders offer different rates and loan terms. A borrower might find they save significantly by shopping around. This holds whether they are considering a credit card cash advance, a personal loan, or a payday loan. However, because of the high annual percentage rate, avoid payday loans whenever possible.

Research Alternatives

Look into other ways to get the needed funds before taking out a cash advance or personal loan. One of these methods could serve as the solution you need to move past an emergency without damaging your overall financial situation.

When to Get an Emergency Loan

Only use emergency loans to bridge a gap. Know the benefits and drawbacks before proceeding. For instance, a cash advance loan serves as a better option than a personal loan for bad credit. Nevertheless, people with bad credit often find an emergency loan offers them many benefits.

Emergency Loans for Individuals with Bad Credit

Individuals with bad credit may find they can secure an emergency loan. However, the interest rate for these men and women often exceeds 30 percent. The actual APR depends on many factors, so people with bad credit should apply and learn what theirs will be.

In fact, some companies no longer require any credit check. They make use of alternative data, such as the borrower’s bank account, when determining creditworthiness.

Payday lenders don’t run a credit check either, in most cases, but charge extremely high interest rates because of the added risk they take on. Credit card cash advances don’t come with a credit check, as the card issuer has determined the borrower’s creditworthiness already.

Alternatives to an Emergency Loan

Consider applying for a zero percent interest credit card before applying for an emergency loan. Individuals with a good credit score may qualify for a new card with a promotional period where the issuer won’t charge interest. Use the card to cover the unexpected expense and pay the card off before the promotional period ends. Borrowers must know cash advances aren’t included in promotions of this type.

Medical providers often offer payment plans. Today, many of these plans allow the borrower to pay the bill without interest, as long as they establish installment payments at the time they incur the bill.

Student loans that are income driven benefit many individuals. Individuals with a federal student loan find they can adjust their payments based on their income and how much discretionary income they have.

Ask friends or family for help. They may advance the funds you need. However, repay them just as you would a traditional lender. This ensures you don’t harm the relationship.

A home equity line of credit allows borrowers to access money they have built up in their home for situations such as this. Nevertheless, many individuals find they need to have an established line of credit in place to access the money quickly. Establishing a new line doesn’t happen overnight. Furthermore, a failure to pay the loan as agreed could lead to the loss of the home.

When you need an emergency loan provider, turn to King of Kash. Individuals who have used this company in the past rave about the outstanding customer service and the speed at which they receive the funds. Furthermore, they share how working with this company has helped them build their credit score. If you need cash fast, visit this provider today. The company will help you get your finances back on track.