Here are The Smart Investor Select’s picks for the best emergency loans for 2023:
Can I Get It With No Credit Check?
There are no credit check emergency loans where the lender will not review either your credit score or credit history when deciding if they will approve your loan. No credit check is a common practice with payday lenders, but they only offer high interest loans.
Since your credit history will tell a lender how well you’ve handled debt in the past, if a lender does not check your credit, they will assume that you are a risky proposition. Therefore, you can expect a very high interest rate and if you are unable to make the repayments on time, you could quickly spiral into a cycle of debt.
Is It Possible To Get Same Day Emergency Loans?
Yes, in most cases where lenders offer emergency loans. The lenders appreciate that if you are searching for an emergency loan, you need access to the funds quickly.
In fact, many lenders offering conventional personal loans will often provide a quick approval decision and fund the loan the same day. Of course, you will need to check the terms of the specific loan to check how quickly it will be approved and funded.
Can I Get an Emergency Loan With Bad Credit?
There are a number of companies that specialize in offering loans for those with bad credit. Just be aware that if you have bad credit, payday lenders and other emergency loan providers will usually charge a very high-interest rate.
They can also have severe financial consequences if you cannot make the repayment on time. So, think carefully about whether these are the best options for you at this time.
If you're looking for an emergency loan with low fees, LendingPoint is an excellent choice. This lender allows you to pre-qualify for a loan without damaging your credit and doesn't impose late payment or prepayment penalties.
While a hard credit inquiry will be utilized if you opt to proceed with the loan, LendingPoint does a soft credit check as part of the pre-qualification process to see what rates and terms you might be eligible for. If accepted, funds might be available as soon as the following business day.
Overall, because there are no late payment penalties for its personal loans, lendingPoint is a wonderful choice for borrowers who are fee sensitive. If you decide to repay your loan early, you won't need to be concerned about paying a prepayment penalty.
- Application Options
- Less than perfect Credit
- Joint Applicants
- No Prepayment Penalty
- Many Payment Options
- Higher interest rates
- Not Available in All States
- Do LendingPoint personal loans offer prequalification?
LendingPoint does allow potential customers to prequalify for a loan to streamline the application process and enable comparison shopping.
You can check the available personal loan offers without triggering a hard credit check. The online application is easy and you simply need to submit your name.
- Can I add a cosigner to a LendingPoint personal loan?
Unfortunately, LendingPoint does not allow joint or cosigned loans. If you want to add a cosigner to your loan, LendingPoint is not the right lender for you and you are better to look elsewhere.
However, the lower credit score requirements and flexible lending requirements may mean that you can qualify for a loan without needing a cosigner.
- Can I pay off a LendingPoint loan early?
LendingPoint does not have any prepayment fees, so you should not incur any penalties if you decide to make additional payments or choose to repay your loan in full before the end of the loan term.
You simply need to speak to the LendingPoint team to obtain a settlement figure to clear your account.
- Is LendingPoint good for debt consolidation?
LendingPoint is a decent option if you’re looking for a debt consolidation loan. You can borrow up to $36,500. While direct creditor payments are not offered, LendingPoint does offer quick access to the loan funds.
You may have the money in your account the following business day after approval, so you can quickly initiate payments to your creditors. However, you do need to bear in mind that there may be an origination fee of 0% to 6% which is billed upfront from your loan funds.
Best Egg offers personal loans for almost any purpose. You can use the proceeds of your emergency loan to pay for home repairs, make a large purchase, refinance your credit card debt or consolidate existing debt.
The lowest interest rates are accessible to borrowers with good credit with Best Egg, making emergency loans more cheap than alternatives like credit card cash advances. Additionally, those who need to swiftly pay for unforeseen bills may benefit from its quick response time.
Best Egg provides personal loans starting at $2,000 that can be used to pay for a range of costs, including medical bills, home renovations, and other obligations.
- Soft Pull Inquiry
- Competitive Rates
- Simple Application Process
- Quick Turnaround Times
- No Prepayment Penalty
- No Joint Applicants
- Origination Fee
- Large Amounts on Short Terms
- Investing Restrictions
- Not Available in All States
Can I negotiate with Best Egg?
Best Egg does not categorically state that it will assist those who want to negotiate debt settlement, but that doesn’t mean it isn’t worth trying.
As with any lender, if you’re experiencing financial hardship or want to rearrange your finances to make steps towards a stronger financial future, it is a good idea to get in touch with Egg. You may be able to negotiate a settlement figure.
Does Best Egg personal loans verify income?
Yes, as part of the personal loan application process, Best Egg will need to verify your identity and income. The bank may ask you to submit supporting documentation such as payslips or bank statements or give permission to connect to your bank.
Does Best Egg personal loans offer prequalification? (soft credit check)
Best Egg does offer pre approval which has a soft credit check and no impact on your credit score. Your pre qualified status is recorded, which will streamline the application process if you decide that you would like to go ahead with the loan.
Does Best Egg offer more financial products besides personal loan?
Best Egg does have a limited product line. In addition to personal loans for a variety of reasons, the bank’s only other financial product is a credit card with no annual fee.
So, if you’re looking for a lender that also offers a wide variety of financial products, Best Egg may not be your best option.
FreedomPlus is suitable for people with good credit and a stable financial situation. It has quick turnaround times which is great if you're looking for emergency loan, and a personal touch that can assist you in finding the best loan for you.
Due to the fact that FreedomPlus charges origination fees, more qualified borrowers may be able to qualify for better terms and larger loan amounts at another top lender.
- Joint Borrowers
- Quick Turnaround Times
- Customer Service
- Higher Minimum Amount
- Interaction With Representative Needed
- Origination Fee
- Not Available in All States
- Do Freedom personal loans verify income?
One of the best features of Freedom is that they offer fast funding. Most customers will receive a lending decision the same day as they submit their application, with funding within three days of approval.
However, there may be some instances where Freedom may require additional supporting documentation to verify income.
- Can I negotiate with Freedom?
Freedom does not advertise that it will match rates, but very few lenders actually do. If you’re shopping for a loan, it may be worth getting a quote and checking to see if Freedom will match the best rate, but there are no guarantees.
Likewise, if you want to negotiate a settlement figure, it is worth speaking to the Freedom team, but you may not be able to agree to a lower figure.
- Can I pay off a Freedom loan early?
Freedom does not have any prepayment fees, so it is possible to repay your loan early either in a lump sum or by making additional payments.
However, if you are thinking of switching to another lender, it is worth considering the origination fee that was paid at the start of your Freedom loan and factoring this into your calculations.
- Do Freedom personal loans offer prequalification? (soft credit check)
Freedom does allow prequalification. If you’re interested in a Freedom personal loan, you can complete a basic application on its website and you can find out the best rates and deals for your financial circumstances and credit profile. This process will not impact your credit score, as Freedom uses a soft credit check.
However, if you decide to proceed with a loan, it will trigger a hard credit check.
On our list of the top personal loans for emergencies, LightStream stands out because, if the loan is authorized by 2:30 p.m. Eastern time on a banking business day, applicants can have their money as soon as the next day.
To be eligible for same-day funding, the borrower must adhere to a number of administrative procedures before the daily deadline (review and electronically sign the loan agreement; provide LightStream with funding preferences and relevant banking information and complete the final verification process).
- No Fees
- Flexible Term Options
- Competitive Rates
- Many Loan Uses
- Joint Applicants
- High Maximum Amount
- Not For Bad Credit Borrowers
- No Soft Pull
- Restrictions for Business Use
Is there a penalty if I pay off my loan early?
LightStream does not impose penalties for paying off your loan in full or in part. You can make additional payments to your account at any time by logging in.
Is a vehicle loan available from LightStream? Are there any restrictions on the type of vehicle that can be used?
Anyone can sell you a vehicle (new or used) (dealer or individual). Your interest rate will be determined by the loan purpose, loan term, loan amount, credit profile, and payment method you choose.
LightStream does not impose any restrictions on the vehicle's year, make, model, or mileage, whether you are purchasing or refinancing.
Is GAP insurance provided by LightStream?
No, LightStream does not provide Guaranteed Auto Protection (GAP) insurance for any of our loans (optional coverage for newer cars that can be added to your collision insurance policy). If you refinance an existing loan with GAP coverage, the coverage will not be transferred.
Which credit bureau does LightStream use to calculate my credit score?
LightStream conducts a hard inquiry with TransUnion or Equifax. Credit scores frequently differ depending on the agency and scoring model used. You can contact either of the credit bureaus directly for more information on how your credit score was calculated.
It should be reiterated that each individual profile is unique, and our credit decisions are based on the specific facts of that profile.
LightStream Terms & Conditions
Rates quoted are with AutoPay. Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice. AutoPay discount is only available when selected prior to loan funding. Rates without AutoPay are 0.50% points higher. To obtain a loan, you must complete an application on LightStream.com which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $25,000 loan at 4.98% APR with a term of 20 years would result in 240 monthly payments of $164.71. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. Truist Bank is an Equal Housing Lender. © 2022 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
Table of Content
How Does Emergency Loan Work?
As the name suggests, an emergency loan is a finance that allows you to access funds quickly to cover any financial emergency. These loans usually have a short term or a few weeks, but they are available to those with good or less-than-perfect credit. However, this does usually come at the cost of fees and high-interest rates.
Emergency loan is a catchall term for different types of quick loans. These include:
- Personal Loans: These are unsecured loans that provide access to a fixed sum of cash without needing to have any security or collateral. You’ll then pay it back in agreed fixed monthly installments according to the loan term. Personal loans typically have a longer term of up to several years, but you can usually get the funding within a day or two and use the funds for almost any purpose.
- Credit Card Cash Advances: While you can use your credit cards to make direct payments to merchants if you need actual cash, you can often charge a cash advance to your account. However, many cards charge fees for a cash advance, and you’ll start incurring interest fees as soon as you initiate the advance.
- Payday Loans: When people are thinking about emergency loans, a payday loan is usually what they picture. These loans typically have a term of a week or two and are designed to help you with a financial emergency between paydays. These loans are available even if you have bad credit, but they have terrible interest rates of up to 400%.
- Car Title Loans: These are similar to payday loans, but you use your vehicle as security for the loan. Since the loan is secured, it can help reduce the rates and interest fees, but if you don’t stick to the repayment schedule, the loan company has the right to seize your vehicle to cover any losses.
How To Compare Emergency Loans?
Comparing emergency loans is similar to any other type of loan or finance product. There are several factors that you need to consider.
- The repayment commitment: You need to make sure that you are comfortable with the amount you need to repay. In the cases of payday loans, this will be the loan amount plus interest within two weeks, but other types of loans will have a payment schedule where you need to pay a set amount each week or month. It is important that you can afford the repayment commitment or you could incur massive penalties and fees.
- The interest rate: While the repayment amount needs to be affordable, you also need to look at the rate you’re being charged. For example, while the repayment amount may be slightly smaller or the same when you’re comparing a payday loan to a cash advance, the interest rate on your credit card is likely to be far less. This means that if you need to defer repayment for a few extra days or even an extra week or two, you will not stung with an expensive cost.
- The long term impact: Although you may have a financial emergency now, you need to think about the long-term impact of your emergency loan choice. The best emergency loan will provide the flexibility to cover your costs now without detrimental impact on your credit report. So, think about how your choice of loan could impact your ability to borrow later.
How To Save On An Emergency Loan?
By their very nature, emergency loans tend to be associated with higher costs and rates. Since the lenders know that you need the funds quickly, this is typically reflected in the costs. So, if you want to save on an emergency loan, you’ll need to take a moment to think about your options.
For example, if you need an emergency loan to cover a garage bill, could you charge it to your credit card rather than take out a loan? Many garages will accept major credit cards, and you will have until the end of your statement period to repay the charge.
If this is impossible and you need to source an emergency loan, don’t just look at the first provider. Many companies will offer a free, no-obligation quote that only requires a soft credit search. So, compare a couple of companies to see who offers better terms. It may not sound like much, but an extra $5 in charges over two weeks indicates a far higher interest rate.
Emergency Cash Loans Vs. Emergency Personal Loan
Emergency cash loans are often called payday loans, while emergency personal loans are simply personal loans that are approved quickly and funded almost immediately. With both loans, you’ll need to repay the money with interest at an agreed date.
However, emergency cash loans are generally for small amounts and are expected to be repaid when you receive your next paycheck. Therefore, they tend to have no credit check and are a higher-risk product with extremely high-interest rates.
Personal loans have a more complicated application procedure. You will generally need to provide your bank or an online lender with proof that you can make your repayment commitments. While it is possible to have the loan approval and funding quickly, they are typically for larger amounts you can repay over a far longer term.
Since a credit check is involved, the lender can have a more accurate picture of your risk profile, which is reflected in your rate.
So, although you can still get funds through an emergency personal loan, you can structure your repayments for a longer-term solution.
Does An Emergency Loan Affect Credit Score?
It depends on your lender. Payday lenders don’t typically report on-time payments for their loans to credit bureaus when you make on-time payments. This means that taking out a loan and repaying it will not help your credit score.
However, all lenders mentioned above report payments to credit reporting agencies, which may help you improve your credit score. But, if you fail to make the agreed repayment, the lender will likely report the default to the credit bureaus.
Alternatively, they may sell the debt to a collection agency which will hurt your score. So, in addition to incurring additional fees and charges, your credit score could be adversely affected.
Can I Get An Emergency Loan For Rent?
Many emergency loan providers allow you to use the loan funds for practically any purpose. Of course, taking on a personal loan to cover rent indicates that you are getting into a debt spiral that may be difficult to overcome.
If you struggle to cover your rent, taking out a payday loan and paying a very high-interest rate to make up the difference will only create a problem for the next payday. When you receive your next paycheck, you’ll need to cover this month’s rent and repay your payday loan.
So, if you’re struggling to cover your rent due to a financial emergency, it is better to ask your landlord for some flexibility rather than slipping into more debt with an emergency loan.
Can I Get A Small Emergency Loan With A 500 Credit Score?
A 500 credit score is considered below average, but this is not prohibitive to qualify for a small emergency loan.
If you need a small amount with a 500 credit score, some lenders will offer loans but do check that you are not paying excessive amounts of interest and fees.
Some credit card providers offer cards for those with below-average credit, but the application process takes time.
What Are The Fees On Emergency Loans?
The primary fees for emergency loans are the interest charges. This can vary significantly from reasonable rates for personal loans to exorbitant rates with payday lenders. However, there may be other fees that you will need to consider before you finalize a loan.
For example, you will need to check what fees or charges apply if you make a late payment. In addition, since you are struggling with a financial emergency, you need to know that if you can only repay a day late, will you get hit with a massive penalty?
Is The APR On Emergency Loan Higher Than on Personal Loans?
Typically, yes, the APR on emergency loans is higher than on a personal loan. This is because rates are calculated according to risk. So if you’re applying for an emergency loan with no credit check or very flexible qualification requirements, it is considered a higher risk, reflected in the rates.
Can I Get A Small Emergency Loan For Car Repairs?
An unexpected vehicle breakdown and the consequent repair bill are among the most common reasons for needing an emergency loan. Getting a small emergency loan for your car repairs is very simple.
However, it may not be the best option to pay for your repairs. Emergency loans tend to have relatively high-interest rates, so it is a good idea to investigate other ways to pay your repair bill.
For example, can you pay your repair bill with your credit card? Or could you use a temporary overdraft on your checking account? These are more cost-friendly ways to spend your repair bill, allowing you to repay the amount within a few weeks without incurring hefty charges.
You may even obtain an advance on your paycheck to pay the bill now. So take a little time considering how you could pay for the repairs before seeking an emergency loan.
Depending on the lender, you may be able to borrow $50 to $1,000 depending on the laws in your home state.
However, you won’t necessarily be approved for the highest amounts allowed by your state laws. The lender will consider your income and other financial commitments when deciding how much you can borrow.
This depends on the lender, but emergency loan providers typically appreciate that you need to get the funds quickly to deal with whatever financial emergency you’re facing.
This means that you can usually expect an approval decision quickly and the funds in your account within one to two days.
This also depends on the lender, as some will take your income declaration on face value.
However, some other lenders may require that you submit a picture of paystubs along with government issued ID to support your application.
It may be possible to get an emergency loan if you are not currently employed. Some lenders classify unemployment as an income source and will allow this to be considered when you apply for your loan. However, it can make getting approved more challenging.
There are some lenders who offer emergency loans to all applicants, even students.
However, you will need to be over 18 with valid ID and able to provide proof of income. You will also need to have an active checking account to receive the funds and facilitate the loan repayment.
With the impact of the 2020 Covid pandemic, the government has recognized that many people are struggling to cover their basic needs.
There is a financial assistance program to help with food, housing, bills and funeral assistance. You can check out the available programs on the usa.gov website. You can find out the qualification requirements and how to apply for each program.