Top 4 Types of Loans for Emergencies

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Financial emergencies are like bad weather: unpredictable and unpleasant. However, modern times provide enough solutions to suit emergencies of any scale. Choose the financial option that suits you based on amount, speed, qualifications, and state regulations.

1. Personal loans

These are the classical loans from traditional financial institutions like banks, credit unions, or online lenders. You get the sum you need at first, which you then repay in fixed monthly installments, plus interest. Additional fees may apply. Depending on your eligibility, you can borrow from $35,000 to $100,000 for a term ranging from 24 to 84 months. Personal loans have a convenient APR of 5.95% on average.

2. Payday loans

Payday loans are a popular form of cash advances that let you access your money almost instantly. You can borrow from $100 to $1,000, which you would repay in a lump sum, usually from your next paycheck. The APR rates on these emergency loans may be as high as 400%. You will easily qualify and receive your money as fast as in one business day. Regulations regarding amounts and terms vary by state.

3. Title loans

A title loan enables you to borrow money by using the title of your car as collateral. The term is usually 30 days, and you may be facing rates of 300% or so. As in the case of payday loans, title loans are easy to obtain. Moreover, lenders don't tend to run credit checks, which is good news for applicants with bad credit. If you don't repay your loan on time, you will lose your vehicle.

4. Credit card advances

Credit card loans may help you out in case of emergency. You can borrow money up to a predefined amount. These loan types are best used for small emergencies when you already own a credit card. There is a lot of criticism about credit card cash advances. Nonetheless, if you are responsible about your spendings, they can benefit you.