Sometimes you will find yourself in situations where you will need fast cash to sort out an urgent issue. The thing about emergencies is that you do not know when you will encounter one. When you encounter emergency situations, you will need to act fast.
In most cases, fast cash can help you to sort out your emergency situations. Emergency loans are becoming increasingly popular because these loans have helped many people. There are several types of emergency loans. However, most of them are short-term loans, especially payday loans.
People get emergency loans for a number of reasons which include:
To avoid late payments
Sometimes, you will realize that your loan payment is due but you do not have enough cash clear the payment. You, however, want to avoid the hefty late payment fees and the effects of late payments on your credit score. You can opt for emergency loans to help you clear your loan.
To avoid stress
You may be hit with an emergency situation that can leave you extremely stressed. For instance, you or a member of your family sustained an injury, your car suddenly breaks down, you suddenly realize that your gas running out, or need urgent cash to undertake urgent repair work in your home and you do not have any cash to sort it out.
Emergency loans can help you to get fast cash to sort out these issues. At least you can get rid of the stress that comes with this kind of issue without any stress.
An alternative to credit card cash advance
Most people get credit cash advances when they need cash urgently. However, this option attracts hefty fees and people who choose this option end up accumulating more debt. Instead of getting a fast cash advance, you can opt for an emergency loan.
An emergency loan can provide all the conveniences you will get with a cash advance. You can get cash as quickly as you can when you apply for a credit card cash advance. Emergency loans are also easy to access if you meet the requirements of the lender. Fortunately, there are several lenders with varied loan requirements.
It is easy to meet a lender whose requirements are easy for you to meet. The good thing about emergency loans is that the rates are usually lower than credit card cash advance rates.
How Does It Work?
The method of applying for an emergency loan is simple. You will need to provide some basic information during the application process. These include the following:
- You need to be a citizen of the United States.
- You also need to provide a valid photo identification card.
- You need to have a reliable source of income.
- The lender will also request that you present a checking account.
There are emergency loans direct lenders as well as lenders who offer loans through third parties. For direct lenders, you need to visit their website, complete the application form on the website then submit. The lender will inform you about the status of your loan. If you have been approved for the loan, the lender will disburse the cash into your bank account.
With third-party lenders, your application will be submitted to a pool of lenders who will review your loan and make their offers to you. You can then choose the lender you want to proceed with. The lender will disburse the cash into your account when the process is complete.
You should note that all lenders will run a credit check on you. Even lenders who do not have a credit score requirement will check your credit history so that they will have a fair idea about your financial situation.
Interest Rates and Fees
The lender will inform you about your interest rate and fee that is attached to the loan. Some fees to look out for include origination fees, processing fees, prepayment fees, and late fees. Fees such as late fees can be avoided if you pay your loan on time. You should compare rates because some lenders will waive some of the fees and others will charge lower fees.
It is important for you to know the rates and fees before you sign the loan. If the lender does not tell you about the rate, you should ask. You should also note that the rates may depend on your credit score.
If you have a higher credit score, you may be required to pay a lower rate. This is because people with higher credit scores are considered to be more creditworthy.
Loan Term and Repayment
The lender will also help you to decide the loan term. The loan term varies and it can be as short as 7 days. Loan terms can also be as long as 15 years.
However, emergency loans are usually short-term loans. The lender will make sure that they help you arrange for a manageable monthly payment.
When it comes to the loan repayments, most lenders encourage borrowers to sign up for automatic bill payments if the loan is an installment loan. When they do this, the cash is taken directly from their account on the due date. The borrower does not need to keep track of the due date and he or she does not need to worry about defaulting on the loan provided that he or she leaves enough cash in the account at the end of every month.
Terms and Conditions
Every lender has his or her own terms and conditions. It is important that you read the lender’s terms and conditions before you engage with them. You should also be sure that you can pay back the loan even before you apply for it. You should also take out an amount that you can comfortably repay.
Do not go for a larger amount simply because you qualify for it. You will end up using the cash on other unplanned things and you will find it difficult to raise the cash to pay back the loan.