Financial emergencies come without warning and present an urgent need for funds. Handling these emergencies can be challenging and overwhelming, particularly if you’re short on cash. Luckily, emergency loans come in handy in such situations. These loans offer quick access to money, plus their approval requirements are quite flexible. With an emergency loan, you have no restrictions on how to use the finances.
This type of borrowing is unsecured and doesn’t require collateral. An emergency loan application process can be done entirely online, and upon approval, the funds are deposited directly into your account within a few minutes. Discussed below are five types of emergency loans.
1. Payday loans
Payday loans are short-term loans that you pay back upon receiving your next paycheck, which can range between two to four weeks after taking out the loan. They’re quick to access and convenient. Payday loans, including ODSP payday loans, have fewer requirements and are thus easily approved by lenders, making them perfect for financial emergencies. They’re ideal for those with bad credit as they don’t involve credit checks.
People who aren’t eligible for credit cards can also apply. Payday loans are unsecured, meaning you’re not required to use your assets as security. You can access these loans whenever you want, making it easier to deal with sudden expenses.
2. Credit card cash advance
A credit card cash advance is a quick way to get money by withdrawing funds from your credit card account. It means you’re borrowing a specific amount against your credit card’s line of credit. You can access a cash advance in various ways, including:
In-person: You can visit the bank with your credit card and request a cash advance
At an ATM: If you have your credit card’s PIN, you can visit an ATM and withdraw your cash advance
Convenience check: If your credit card came with convenience checks, write yourself a check, then deposit or cash it
A credit card cash advance is ideal for financial emergencies as it doesn’t require any credit checks and allows immediate access to cash. Also, your account doesn’t need to have money for you to access the loan. Also, there isn’t an approval process involved.
3. Personal loans
A personal loan is an installment credit that lets you take out a lump sum of cash to cater to various expenses and then pay it back in regular installments over a specific period. Unlike other credit products, these loans are low interest, provide fast funding, and have few limitations on how the funds can be used, making them a good alternative for emergency expenses. With an unsecured personal loan, you don’t need collateral to get approved.
A title loan is a secured borrowing where you use an asset as collateral. The loan is easy to qualify for because it has few requirements. Also, you don’t need good credit to be eligible. Since title loans don’t involve credit checks, lenders only need a few minutes to review your application. Upon approval, you can get the cash almost instantly.
5. Paycheck advance
A paycheck or payroll advance can be offered by your employer. It means getting money in advance from the earnings you’re expecting. Based on the agreement with your employer, the funds can be deducted from your paychecks automatically in installments.
While unexpected expenses can be stressful to deal with, an emergency loan can save the day. Familiarize yourself with the various emergency loans and how they can benefit you before applying.