Emergency Loans: What They Are & How to Get Them OnlinePublished on May 15, 2020 by Daniel Azzoli
In a financial emergency, looking for emergency loans online may make sense. But like any loan or line of credit, these products must be used wisely.
When financial disaster strikes at random, you may not always be ready to handle the expenses that follow. So, you may find yourself at the side of the road — the hood of your car smoking — wondering how you’ll afford the tow truck, let alone the emergency trip to the garage.
Unexpected emergency expenses may cause serious stress, but there may be a solution.
If your savings are as lackluster as the rest of the nation’s — only 40 percent of Americans in 2018 had $1,000 set aside for emergencies — you may consider an emergency loan. These products are designed to provide a temporary solution for urgent expenses.
There are a lot of emergency loans available and what you may qualify for depends on a variety of factors including your credit history. Let’s take a look at those options now, so you might know where to get quick cash loans online the next time disaster strikes.
What is a Financial Emergency?
A financial emergency happens any time you don’t have the cash you need to cover an unexpected, essential expense that may have immediate consequences for your health, safety, or financial well-being, if you ignore it.
There may not be one type of cookie-cutter emergency that we all face, but there are some urgent situations that plenty of people deal with every day.
Here are some common examples of those below –
- Auto repairs: A vehicle can be a lifeline if you live in a rural community, rely on it every day for work, or have mobility issues. If you blow a tire, it’s important you get it fixed as soon as possible. An emergency online line of credit or loan may help you get back on the road.
- Home maintenance: A pipe bursts, the furnace stops working, and the hot water heater starts to leak. Any of these issues can happen in the place you call home, and they may be expensive to fix if they do. An emergency online line of credit or loan may help you take on essential home repairs.
- Medical bills: Sometimes, getting sick means you have to tough it out through a stuffy nose. Other times, it means going to see the doctor and undergoing treatments. Between your doctor’s fee and medication, you also might miss a day or two from work. Emergency loans online may help you handle these unexpected medical expenses.
Of course, your financial emergency may look completely different. That’s the nature of emergencies; they’re unpredictable.
While it may be challenging to anticipate what goes wrong in your budget next, it’s easier to understand what an emergency is not.
Here are some quick examples of what emergency loans online should not be used on:
- Birthday presents
- Unnecessary shopping
- Regular or expected bills
What Are Emergency Loans Online?
Emergency loans provide fast cash online to help pay for unexpected yet essential expenses, like the ones we outlined above.
More formally, they’re a kind of short term loan you get online rather than from a traditional financial institution.
Because they’re available online, they cut through some of the traditional processes that may slow down other in-person options.
Many online lenders automate the application process, so you can get the cash you need faster if you’re approved.
Examples of Emergency Loans Online
Think there’s just one kind of emergency loan? You’re mistaken. That’s actually one of the 4 myths about online loans that we debunked in an earlier post.
All manner of personal loan and line of credit options are available online, each with their own uses, rates, terms, and conditions. Depending on your personal financial circumstance, which may include your credit history, you may have a variety of options.
Let’s take a look at some of them below.
An installment loan is a lump sum of money that you must repay, with interest and/or fees, over a series of fixed payments within a pre-determined time period.
The amount you qualify for may depend on multiple factors, including your credit history. Borrowers with higher credit scores may have access to higher loan limits than those with lower credit scores.
Line of Credit Loans
An online line of credit gives you an amount of money you may withdraw from up to your pre-determined credit limit as you need it. Interest and other charges only apply to what you use and not your limit.
While comparing a typical online line of credit vs a loan, you may notice that there are a lot of differences. Namely, a line of credit is a form of revolving credit. As you pay off your balance, you may continue to withdraw up to your credit limit.
This may be a practical option for those who aren’t sure how much an emergency, such as an unexpected car repair, will cost them. You may tap into your online line of credit if you end up having to bring your car back in for further repairs.
Paying down your outstanding balance is one way to maximize your line of credit. This may help keep your funds available for the next emergency.
As the only type of secured loan on this list, title loans make use of your car’s title as collateral. If you don’t repay what you owe, the loan issuer may seize your car as payment instead.
They may be an option if you have poor credit. Putting your car on the line may offset the risk you pose to a financial institution. Potential lenders may approve your request for funds as a result.
Finding Emergency Loans Online Wisely
Before you start filling out the first application you find, you may want to check what’s available.
The amount you qualify for with an online line of credit or loan from the options listed above may depend on your credit history.
Luckily, browsing through various online lenders’ websites for an online line of credit or loan may help with the research process. You can bring up individual financial institutions’ websites at the same time, so you can compare their products and services side-by-side.
In the meantime, check out these credit myths and misconceptions about what may impact your credit history.
Understanding how your financial habits may affect what’s in your credit file may give you some tools to make effective changes.
Post-Emergency Review: Preventative Steps
Once the ordeal of your emergency dies down, it’s the perfect time for reflection.
Ask yourself: why weren’t you able to handle your unexpected expense? If you’re like 32 percent of Americans who don’t have savings, it’s because you lack an emergency fund.
What is an Emergency Fund?
It’s a dedicated savings account that acts like a financial cushion, absorbing the impact of unexpected emergency expenses. Depending on how much you have in savings, it may even help you during financial emergencies such as a serious health issue that arrives with a hospital expense.
It’s always a good idea to be financially prepared as life can throw us some pretty mean curveballs sooner or later. Don’t wait to see how your finances will fair without an emergency fund.
How Much Should You Save?
Like all things in the financial world, the answer to this question is subjective, as it mainly depends on your income and expenses.
Nevertheless, a common piece of advice is to save between three to six months’ worth of expenses in this fund.
Now, to be fair, the sheer size of this savings goal is substantial. It may even be daunting if you’re starting from absolute zero, but don’t let it intimidate you. Even the biggest goals have to start somewhere — if that’s just $20 a month, it’s still better than nothing.
Learning how to break your big goal into smaller, easier-to-achieve tasks may help you stick with your financial goals — no matter how big they are.
The trick is consistency. Once you find out how much you can afford to save each month, make it so you never forget. Set up an automatic deposit to ensure your cash goes to your savings with no chance of you spending it on something fun.
In a perfect world, you’ll be able to live out your life in peace, without ever having to worry about money. But that may just be wishful thinking. Something’s bound to go wrong eventually, and when it does, it’s likely going to cost money.
Maybe your car breaks down just after you serviced it, or your furnace’s pilot light won’t relight. If your savings are low when you face these bills, you have options.
You may be able to find quick cash loans online to help in your time of need. Just remember that many of these options may come with expensive charges. Only take them out if you know for sure you can afford them.