Financial problems can occur anytime in any size or shape. These problems can break a person’s budget and put them in a spiral that makes it difficult to escape. If you find yourself stuck in this predicament, an emergency loan may be the solution.
An emergency loan is just like a normal loan, but it is granted to individuals who do not qualify for traditional loans. So if you find yourself in a bind, needing cash fast, and can’t wait on the banks for their turn, this loan can help you. As long as your credit score is high enough that it qualifies for this type of loan, then these types of loans come with a lower interest rate than other kinds.
What Is An Emergency Loan?
An emergency loan is an unsecured personal loan that is intended for urgent needs. This type of loan can be granted to anyone, including college students and working professionals as well. The terms of an emergency loan are also flexible; the longer the term, the lower the interest rate and the higher your credit score will be.
The loan amount that you can borrow depends on your needs and the lending institution. It is a short-term solution: typically between 6 to 9 months, with a high-interest rate. For people who may not qualify for a normal personal loan but still need cash fast, a title loan can be just what they need.
What Can You Use an Emergency Loan For?
This is a type of personal loan and you can use it for various emergencies such as:
- Medical bills: Medical emergencies can occur at any time, and so can medical bills sending you into financial trouble. If you are in a bind, with no money and unable to pay your bills on time, then an emergency loan may be your solution.
- Paying off bills: This could be for a recent bill you received or a bill that has been lingering for a while. Even if you have no interest in repaying this loan, do all that you can to avoid paying these late fees.
- Paying utility bills: In times of emergency, utilities can go offline, leaving your home without power. This financial product could allow you to manage these payments and avoid any penalties for late payments.
- Paying rent: Rent is usually due every month but some people find themselves in a bind when it comes to paying this bill on time. With an emergency loan, you can pay your rent while preventing any late fees.
Funeral expenses: One of the worst times to receive a bill is when someone close to you has passed away. If your family is suffering from grief and financial troubles, this financial product can help you find some relief.
- Education costs: As a college student, tuition and fees can add up quickly. Unfortunately, taking out student loans is not an option for some students and if you need cash in a hurry.
- Home or vehicle repairs: You may find yourself in a bind when it comes to paying for these repairs. A repair that is not urgent could be delayed by some unforeseen event, leaving you at the mercy of your automobile insurance company. An emergency loan could help you out of this predicament and get these repairs done sooner.
- Other expenses: This can include other bills that are not listed above. Whether it is paying down debt, or buying a new television, a fast loan can be a great solution to many problems.
Where You Can Get An Emergency Loan?
There are multiple sources available in the market from where you can get an emergency loan. Listed below are a few of these sources:
- Banks: Banks are considered as one of the most reliable lending institutions. However, they can be quite selective on what papers you have to provide them and so you should go through all your options before choosing which bank to apply to.
- Local credit unions: Many people do not know that some credit unions are not affiliated with banks and therefore have better terms than a bank. These credits are usually located in one city or state only and require a local membership number or a membership ID card depending on their requirements.
- Online lenders: Online lenders provide loans directly to consumers and not to banks. They charge higher rates of interest and have shorter terms. According to federal regulations, online lenders cannot lend more than $500 to any individual in a month. Customers can apply for a quick title loan online in less than one hour.
Things To Consider While Applying For An Emergency Loan
There are a few things to consider when applying for an emergency loan.
- Repayment Terms: By law, these loans cannot be offered for more than the decided period by lending institutions. In order to get this loan extended, you will have to find a financial institution who is willing to extend it for you. At the point of application, ask about the terms and conditions of this extension as well as the interest rate that will be applied on top of your existing loan.
- Late Fees: If you want to be safe, then ask what the late fees will be for this loan. Make sure that you can afford to pay this fee at the end of your loan term.
- Repayment Process: The process of repayment is different from that of a traditional loan and it is important that you understand how much will have to be paid every month as well as when these payments will have to be made.
- Credit History: Before you apply for the loan, it is important that you provide credit history. This ensures that no one will be able to take advantage of you and charge exorbitant interest rates.
- Proofs of Income: This is important since your application will be sent directly to the lender and not directly to their credit department. A business letter or tax returns can be used as proof of income.
It is important to understand every aspect of a financial product that you are going to opt for. But do not forget an important aspect i.e. getting a loan from a reliable institution. Find a reliable lender such as Canadian Cash Solutions and get an emergency loans and get rid of your financial troubles.