Tips and Advice

Your Complete Guide to Personal Loans in a Hurry

Our expert guide to emergency loans helps you, how to compare and choose, what are pros & cons, how to prequalify, and where to apply to secure funds fast.
A worried woman talks on phone about emergency loan
Written by:
Anna Baluch
Edited by:
Kristin Marino verified

Emergency expenses are bound to pop up every once in a while. If you don’t have the cash to pay for them upfront, emergency loans can come in handy. In most cases, they’re personal loans that offer an easy application process and fast funding.

Let’s take a closer look at how emergency loans work, the best emergency loan lenders, and how to get an emergency loan. We’ll also go over the pros and cons of this financing option as well as frequently asked questions related to it.

How Do Emergency Loans Work?

Offered by banks, credit unions, and online lenders, emergency loans are personal loans you can use to cover a variety of unforeseen expenses. Once you take one out, you’ll receive the cash you need to get through a surprise financial obstacle like a car repair or medical bill.

What are emergency loans used for?

Since emergency loans are versatile, you may put their proceeds toward just about anything. If your car or HVAC system breaks down unexpectedly, for example, an emergency loan may be just what you need to fund the repair costs.

You can also use an emergency loan to pay for out-of-pocket medical costs or a loved one’s funeral expenses. In addition, if you lose your job, you can turn to an emergency loan to help you with your rent or mortgage, utilities, groceries, and other basic expenses until you get back on your feet.

Who might need an emergency loan?

If you don’t have enough cash savings to cover an emergency expense, an emergency loan is worth considering. This is particularly true if you have decent credit and can qualify for a good interest rate.

Even if you don’t have the best credit, rest assured you might still get approved for an emergency loan. You will, however, have to settle for a higher interest rate and pay more for your loan in the long run.

You’ll find that an emergency loan can alleviate a stressful situation and make it easier to deal with an expense you didn’t see coming. Just make sure you don’t rely on it for everyday expenses you can budget for in advance.

How do they work?

Emergency loans are installment loans, meaning you’ll pay them back in increments or installments over an agreed-upon term, which can range from a few months to a few years or even longer. While interest rates vary from lender to lender, your rate will likely be based on your credit, income, and debts.

Depending on the lender you choose, you may receive funding the same day you apply or within a few business days via direct deposit, check, or a prepaid card. You’ll pay back what you borrow over time plus any interest and fees, usually through fixed monthly payments.

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How to Compare and Choose

While it may be tempting to go with the first emergency personal loan you find, doing so can cost you more over time. When you shop around for an emergency loan, be sure to consider the following factors:


An APR is an interest rate that includes all the fees and costs of borrowing money. It will determine how much you pay for a loan so it’s certainly worth comparing. The lower the APR, the more affordable the loan will be. If you have strong credit, you can expect to secure a low APR. On the flip side, if your credit isn’t in the best shape, you may have to accept a higher APR that will cost you hundreds or even thousands more.

Origination Fees

Some lenders charge origination fees which are upfront fees to cover the cost of processing your loan. Also known as administrative, underwriting, and processing fees, origination fees usually range from 1% to 8% of your loan amount. In most cases, lenders will deduct the fee from the loan amount, reducing how much you’ll receive. Sometimes, however, you may be able to pay for it out-of-pocket.

Special Features

Special perks and features can make an emergency loan more valuable. You may come across lenders who offer discounts for enrolling in automatic payments. Other lenders will send you monthly credit score updates for free so you always know where you stand credit wise. Hardship assistance, trial periods, and financial coaching might be offered as well.

Repayment Period and Terms

Your repayment period will play a significant role in your monthly payment. While a longer term will have lower monthly payments, you will pay more in interest over time. When you shop for an emergency loan, consider how fast you’d like to repay it and what type of monthly payment you can afford. Fortunately, many lenders have loan calculators that can help you estimate your monthly payment for free.

Funding Time

If you need a loan to cover emergency expenses, chances are you can’t wait long for it. Some lenders may deposit the money in your account the same day you apply for a loan and accept it. Others might take days or even weeks to make a decision on your application and distribute the funds.

How to Get an Emergency Loan

Here’s what you need to know if you want to move forward with an emergency loan.

What It Takes to Qualify

Every lender has its own unique qualification requirements. Most of them, however, will consider your credit, income, employment situation, and ability to pay back what you borrow. While some lenders require a good credit score, others are more lenient and willing to approve borrowers with poor or fair credit.

To increase your chances of approval, avoid taking out new credit and keep your credit card balances low. Also, make any current loan payments on time. Additionally, if you don’t have great credit, consider applying for a cosigner as they can increase your chances of getting approved.

Steps to Applying for an Emergency Loan

To apply for an emergency loan, follow these steps:

1. Compare emergency loans: Remember that not all emergency loans are created equal. Therefore, take the time to do your research and shop around for the best emergency personal loan for you. Once you find a few options that pique your interest, compare their interest rates, terms, funding times, fees, special features, and requirements. Doing so can help you choose the best loan for your particular needs.

2. Read reviews: After you decide on a loan, make sure the lender is reputable. Read their customer reviews on third-party sites and check their ratings on the Better Business Bureau (BBB). Make sure they’re a respected lender with plenty of satisfied customers.

3. Prequalify: If possible, prequalify for an emergency loan and find out what types of rates and terms you may qualify for. All you have to do is fill out a short application. Since prequalifying won’t impact your credit, you have nothing to lose. There are emergency personal loans available for borrowers with bad credit, so don’t let some dings on your credit stop you from applying.

4. Fill out the application: Next, move on to the formal application process, which can likely be completed online. Be prepared to share basic personal information like your name and birth date as well as financial details. You may also need to upload documents like a government-issued ID, paystubs, and tax forms. Note that during this step, the lender will likely pull your credit, which may take a hit temporarily.

5. Wait for a decision and funding: If you did your research and chose a lender that offers fast funding, you shouldn’t have to wait long for the money to be distributed to you through direct deposit, a check, or prepaid card. In most cases, direct deposit is the fastest way to collect the funds.

What You Need to Apply

To apply for an emergency loan, you’ll need to share your name, birth date, address, and Social Security number. The lender may also ask you for your annual income, monthly housing expenses, and other financial questions. In addition, you’ll need to upload a copy of your driver’s license or passport as well as documents that prove your income like pay stubs and tax forms.

Emergency Loans Pros and Cons

Just like all financial products, emergency loans come with pros and cons including:


  • Flexible: Most lenders will let you use your loan to cover virtually any surprise expense. Whether you need to pay for a small car repair or a large vet bill, an emergency loan is sure to help you out.
  • Quick application: Oftentimes, you’ll be able to apply for an emergency loan online, from the comfort of your own home. Most applications only take several minutes to complete.
  • Fast funding: Emergency loan lenders pride themselves on fast funding. Depending on the lender and when you apply, you might receive your money that same day, within 24 hours, or in a few days.
  • Many options: There is no shortage of emergency loans on the market. As long as you shop around, you’ll find one or two that meet your unique needs.


  • Fees: Since lenders want to make money on the loans they offer, many will charge fees. These include origination fees, late payment fees, returned check fees, and prepayment penalties.
  • Need good credit for the best rates: In order to secure the lowest interest rates on emergency loans, a strong credit history is often necessary. If you don’t have good or excellent credit, your loan will cost more.
  • Predatory lenders: There are some predatory lenders with a poor reputation that offer emergency loans with sky-high interest rates and fees. They may increase the overall cost of your emergency by a significant amount of money.
  • Can hurt your credit: As with any loan, late or missed payments on your emergency loan may lower your credit score. This can make it difficult to secure financing in the future.

Frequently Asked Questions (FAQs)

What are alternatives to emergency loans?

If an emergency loan doesn’t seem like a good fit for you, there are other options. A 0% APR credit card may make sense if you’re able to repay the balance by the end of the introductory period. You may also reach out to your creditor to discuss payment plans or hardship options. Also, if you have friends and family with some extra cash, you may want to reach out to them. Just be sure to pay them back or you may put your relationship at risk.

Where can I get an emergency loan?

Fortunately, there are many places you can go to for an emergency loan. If you have a bank account at a bank, you may want to explore personal loan options there. Another option is a credit union that you’re already a member of. Online lenders also offer emergency loans that come with a wide range of rates and loan amounts. You don’t have to be a member or account holder to take advantage of them.

Can I get an emergency loan with bad credit?

Yes, even if you have a FICO score between 350 and 579, you may be able to lock in a personal loan for emergencies. To increase your chances of approval, however, apply with a co-signer or choose a secured loan that involves collateral or something valuable you own like a car. You may also have more luck with a credit union loan as credit unions tend to have more lenient qualification requirements.

How can I prepare for financial emergencies?

Ideally, you’d be well-prepared for unforeseen expenses and never need an emergency loan in the first place. To do so, build up an emergency fund with three to six months worth of expenses. You might also want to reduce your expenses or pick up a part-time job or side hustle so you can boost your income and increase your reserve funds.

What are common emergency loan fees?

Emergency loan fees vary greatly. Many lenders do charge an origination fee, which is a percentage of your loan amount. Lenders might also impose late payment fees, returned check fees, insufficient funds fees, and annual fees. Some may even bill you extra if you pay off your loan early. Note that lenders who don’t charge any fees may make up for it with higher interest rates.

How do secured emergency loans differ from secured ones?

Emergency loans can be secured or unsecured. Secured loans use an asset as collateral. If you default on a secured loan, the lender has the right to seize your property. Unsecured loans are solely based on your credit and don’t require collateral. Compared to secured loans, unsecured loans are riskier for the lender and therefore harder to get.

Are there any emergency loans I should avoid?

When you’re in desperate need of cash, you may agree to any emergency loan you get approved for. Doing so can cost you a great deal of money and headaches over time. Do your best to avoid payday loans, pawnshop loans, and other emergency loans with exorbitant interest rates and fees.

Bottom Line

  • Emergency loans are flexible, meaning you can use them to cover car and home repairs, medical bills, funeral costs, and any surprise expense.
  • Before you commit to an emergency loan, shop around and compare all your options. Then, research lender reputations and take advantage of prequalification tools.
  • Once you find an emergency loan you like, gather your personal and financial information so you can fill out the formal application quickly and thoroughly.
  • Depending on the loan you chose, you can expect to receive your funds anywhere from the same day you apply to a few business days.
  • Be sure to repay your loan according to the terms in your agreement or your credit score and finances may take a hit.