5 Different Types of Emergency Loans

5 Different Types of Emergency Loans

Sometimes life becomes so unpredictable, and unexpected occurrences don’t seem to want to leave you alone. You find yourself in a tight financial situation, and the only thing that can come to your aid is some emergency funding.  

But no matter how tough things are, you should never rush on getting emergency loans without knowing what you’re getting into. Understanding the types of emergency loans available is crucial.

Here are five different types of emergency loans you should look for.

Personal Loans

Personal loans help a lot when it comes to an emergency. But you must have a good credit score to qualify for an unsecured personal loan. Forget about credit cards when you want an instant loan for your emergency.

Personal loans are incredible because you have the option to pay the loan in installments. The loan repayment period and the interest rates are also not too bad.

Another positive impact of getting this loan is that you don’t have to borrow a large amount of money than you can afford. Lenders set their fixed amount you can borrow. You’re not allowed to borrow more than the specified, but you can borrow less.

Payday Loans

Get an unsecured payday loan whenever you’re in a financial crisis. Check with several digital lenders who will get back to you as soon as possible. But make sure you can pay back the entire loan in the next day without missing it.

As long as you’re employed, and you have a monthly salary, there’s nothing stopping you from applying for a payday loan.

Low credit scores will also not lock you out of this kind of loan. Many payday loan lenders will not even check your credit score.

Credit Card Cash Advances

An emergency shouldn’t worry you if you have an existing account with a credit card. You can visit your bank branch or an ATM to get money as soon as possible.

Credit card advances are not entirely friendly to offering instant loans. Your credit card balance dictates the amount you’re required to borrow.

Interest rates charges in credit card advance are also very high compared to other regular purchases. Another significant setback that can make you shy away from credit card advance is that the interest rate starts accruing after taking a loan.

Loans from Pawnshop

To secure a pawnshop loan, you must have a valuable item that acts as collateral for your loan’s approval. The lender will check the value of your collateral to see if it meets your loan specification.

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Once your loan is accepted, you’ll receive it plus a pawn receipt of your valuable. Pawnshop loans are quite cheap compared to other loans for quick cash. Failing to repay the loan on the agreed period will make the pawnshop confiscate the item.

Friends and Family

Family and friends can help a lot when you’re in dire need of cash for an emergency. Before you go out or get a loan online, share the ordeal with your family and friends.

If they don’t have a crisis of their own, they can help you with money to offset your emergency. Also, make sure your loan terms are clear and repay them on time to improve your borrowing relationship.