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Personal Loans

Emergency Loans: Where to Get the Best Ones

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If the uncertainty of the current COVID-19 (coronavirus) situation has you worried about possible financial hardship, know that you have several options that can help you get through this time.

Read on to learn about solutions you can use to help meet your financial obligations when money is—or could become—tight. From government relief and creditor assistance to savings or an emergency loan, peace of mind may be closer than you think.

Consider All Your Options

During a health crisis unlike any we've ever seen, financial concerns may have you wondering how you're going to keep up with all your bills in the coming weeks and months.

The good news is there are several solutions that can help. Before taking any steps, consider all your options and resources to determine the best way to cover your expenses. Here are some to consider:

  • State or federal government relief: With the COVID-19 crisis response changing rapidly, states and the federal government are continuously updating relief measures to help consumers who may have lost their job, had their hours reduced, need to take sick time or are experiencing other financial hardship. Look to your state governor's office, the IRS, the Consumer Financial Protection Bureau or USA.gov for more information on what assistance may be available to you.
  • An emergency fund: If you've saved up an emergency fund, now's the time to use it. Use the money to cover as many necessary expenses as you can rather than paying fees or interest to borrow money.
  • Your bank or credit union: While many banks don't offer personal loans, it doesn't hurt to ask your bank or credit union if there are any borrowing options available. You may be able to get the money quickly deposited into your account rather than waiting for a transfer.
  • Assistance from your creditors: If you don't have enough money to pay all your bills, contact your creditors and ask about hardship options. They may be able to temporarily reduce your interest rate or payment amount, or pause your payments. Lenders may also be able to place your loans in deferment or forbearance. You do not have to make loan payments when a loan is in deferment or forbearance, and the lender will not report late payments to the credit bureaus. In addition, they may report the account to Experian with a statement that indicates you have been affected by a natural or declared disaster, which can help protect your credit history and credit scores.
  • Friends and family: Mixing personal relationships and finances doesn't always turn out great, but it's something to consider. When borrowing money from family, be sure to set clear expectations, and even write up a contract with the terms you both agree on.
  • Credit cards: While credit cards tend to have higher interest rates, you may have a card (or be able to get a card) with a promotional 0% annual percentage rate offer. You can avoid interest by using the card and paying off the balance before the promotional rate ends, which could make this a better option than taking out a loan. If you're considering a credit card, find out which offers you may qualify for using Experian's CreditMatch™ tool.
  • Credit card cash advances: Using your credit card to get a cash advance may be an option if you're making a purchase where credit cards aren't accepted. However, you may have to pay a fee and the cash advance will likely carry a high interest rate, even if your card offers a promotional rate on purchases. Because of the fees and rates, a cash advance may be a more expensive option than other types of loans.
  • Emergency loans: While "emergency loan" is a description of how you plan to use the money rather than a specific type of loan, you'll often see unsecured personal loans described as such. The number of personal loans on the market has grown substantially in recent years, so if you're considering one, learn more about what is involved and which loans might work for your situation.

What You Need to Know if You're Considering an Emergency Loan

An unsecured personal loan does not require you to provide collateral to receive the funds. Lenders typically let you use personal loan funds for almost anything, which means they can help during a variety of emergency situations.

There are a few additional fine points to know as you look for a personal loan:

  • Your state of residence can be important. Some lenders don't offer loans in certain states. The minimum and maximum loan amounts and fees can also depend on what state you reside in.
  • Interest rates can vary widely. Lenders often have large interest rate ranges, and you may wind up getting offered a rate that's much higher than what you'd pay on a credit card.
  • There's no guaranteed loan amount. While lenders may offer "up to" a certain amount, that doesn't mean you'll get approved for the entire amount you request.
  • Look closely at the fees. Many lenders advertise that they don't charge application or prepayment fees. But often you'll still need to pay an origination fee.
  • Funding speed can vary. You may be able to get funds in your account within one or two business days. However, the timing can depend on when you submit your application, how long it takes to verify your information and the bank where you want the money deposited.
  • Find a reputable lender. All loans are a contractual commitment, so be mindful of the fine print, payment terms and interest rates. Make sure to research and pay attention to consumer reviews of loan providers. This could help you avoid predatory lenders or unfavorable terms.

If you've considered your situation and believe an emergency loan is the right solution for you, check out these four online lenders, which offer quick unsecured personal loans with potentially low interest rates.

4 Top Lenders That Offer Quick Emergency Loans

LendingPoint

LendingPoint is an online personal loan lender that focuses on applicants with less-than-stellar credit. You may be able to borrow $2,000 to $25,000, can apply with a soft credit pull and may be able to get the money within one business day. You may pay an origination fee ranging from 0% to 6% depending on your creditworthiness.

OneMain Financial

OneMain Financial provides loans starting at $1,500 and is a mixed bag when it comes to speed and funding. After prequalifying online, you'll need to visit a OneMain Financial branch to complete the loan process. You may be able to get a check for your loan amount, which could be faster than a direct deposit.

SoFi

If you have good to excellent credit, SoFi could be one of your top choices. Loan amounts range from $5,000 to $100,000, there's no prepayment penalty and, unlike many lenders, SoFi doesn't charge origination fees. It may take a few days to receive the funds, but as with other lenders, you can check your rate without impacting your credit.

Upgrade

Using Upgrade, you can apply with a soft pull, choose your loan option (if you're approved) and receive funds within a day of completing the verification process. Overall, the process should take about four business days. Loan amounts vary from $1,000 to $50,000, and there's a 1.5% to 6% origination fee.

Bottom Line

Wading through all the options during a financially uncertain time can be difficult, but you do have options when you need cash in a hurry. If you think an emergency loan might be your best option, you can use a tool like Experian CreditMatch™ to quickly compare lenders and loan offers with one soft credit pull.

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