Emergency loans can offer the perfect solution when those unexpected and urgent financial emergencies arise. Emergency cash can be used for anything from a boiler repair to a new set of tyres for your car, and the release of the funds is, as you might expect, very fast.
What is an Emergency Loan?
The term emergency loan typically covers any type of short-term loan that is quick to access and has a shorter repayment period. Things like payday loans will often be considered emergency loans.
When to Take Out An Emergency Loan
Emergency loans are designed to help in urgent financial situations.
For this reason, it’s important that you take them out in suitable and appropriate scenarios where you fully understand the terms of the loan. For non-emergencies, you might consider personal loans as an alternative.
Here are a few common reasons that people turn to emergency loans:
Unexpected bills and emergency expenses. Household emergency funds protect against some unexpected costs, but around a third of UK households have less than £1000 set aside for emergencies. When bills and repairs are urgent, sometimes borrowing is essential.
A payment cannot wait until payday. Emergency loans deliver cash almost immediately and this makes them a suitable option if you need some cash but can’t quite wait until your pay hits the bank. (Learn more about payday loans.)
Credit cards aren’t suitable or are maxed out. A credit card can be very useful in a financial disaster, but if you’ve reached your credit limit or have bad credit, cards might not be able to help in an emergency.
Emergency Loans for Bad Credit
Bad credit emergency loans aren’t impossible, but they can be slightly more complex. The struggle comes when trying to work out where exactly the best loan options are, and which lenders are more willing to lend to those with imperfect credit.
If you’re trying to get an emergency loan with a missed payment or CCJ on your credit report, your options might be slightly more limited. If you go through a broker a lot of this worry about rejection and finding suitable lenders can be eased.
A broker will do a lot of the hard work for you. Badger Loans, for example, will present your case to a panel of over 30 lenders to see which loans you will qualify for and you won’t have to do multiple credit checks to see which can and can’t work. Long-term, this can be more beneficial for your credit score than applying for loans and getting rejected by multiple lenders individually.
Do You Get Emergency Cash Immediately?
The time it takes to receive funds will vary from lender to lender but, because of the nature of emergency loans, it’s usually pretty fast.
There are a number of factors that will impact approval speed. Here are a few:
The lender you choose and their individual policies
Your own credit history and loan application
The amount that you are borrowing
The time of day (if it needs manual approval)
Bank Holidays (and sometimes weekends)
When it comes to arranging an emergency cash loan, Badger Loans responds quickly. The entire process takes less than 15 minutes, and if your criteria match what the lender is looking for, you can have your money deposited directly into your bank account the same day.
Will I Be Accepted for An Emergency Loan?
There are no guarantees of acceptance, and every loan is agreed on a case-by-case basis. Saying this, there are a couple of things you can do to give yourself the best chance of securing a loan.
Understand Your Credit Report
Your credit report isn’t the be-all and end-all of getting your hands on emergency cash, but it can impact which lenders are the best to go to as some are more strict than others.
Having a good understanding of your own credit can help you to identify whether you are an “attractive borrower” for lenders, or whether you might be best seeking specialist bad credit loans. When it comes to emergency loans and securing time–sensitive funds, speed can be important. A broker will be able to help you with this process and identify any problem areas in your credit profile quickly that might impact which lenders are the most suitable.
Typically lenders that are newer to the market will be more strict as providing a short-term loan holds more financial risk.
Compare the Best Emergency Loans
There are lots of options out there, so how do you know which are the best emergency loans?
Typically, it’s advised to research all of the options available, but with emergency loans, this might not be possible. Here are some key things to look out for.
1. Interest Rates
Look for loans with competitive and (importantly) transparent interest rates.
Avoid loans with excessively high-interest rates that may lead to financial strain. Expect emergency loans to have higher rates than personal loans or long-term options.
2. Reputation of the Lender
Research and choose lenders with a good reputation and positive track record.
Check online reviews and customer feedback to gauge the lender’s credibility.
3. Flexible Repayment Terms
Emergency loans often have a shorter repayment window but that doesn’t always mean they’re completely inflexible.
Consider lenders that allow early repayments without hefty penalties.
4. Affordability
Assess your own financial situation and borrow only what you can afford to repay.
Choose lenders that offer loan amounts and repayment periods that are tailored to your needs.
5. Credit Score Consideration
Explore lenders that consider a range of credit scores.
Some lenders specialise in providing loans to individuals with less-than-perfect credit.
6. Speed of Approval
Opt for lenders with a reputation for quick approval and release of funds. In emergencies, fast access can be crucial.
7. Customer Support
Choose lenders with responsive and helpful customer support.
A reliable support system can be essential for addressing concerns, questions, or unexpected situations.
8. Regulatory Compliance
Get Help Finding The Best Emergency Loan Lender
Of course, you can take the time to analyse all of your options yourself, but the likelihood is that an emergency loan needs a quick payout. In these situations, you have a few extra options, one being finding a broker website (like this one.)
Badger Loans provides a quick and easy way to get an emergency cash loan without the need for guarantors. It’s really simple to apply for an emergency cash loan with Badger Loans. Fill out a short form and you’ll be put in front of our panel of over 40 lenders. Borrowing amounts range from £100 up to £25,000 over 3 months to 5 years.