When dealing with unanticipated expenses, such as hospitalization or car repairs, and you don’t have a stash of cash ready, it can quickly become a financial disaster. Although other loan options are available, those who need money quickly for unexpected expenses like those mentioned above often turn to emergency loans.
An online emergency loan is a perfect option if you don’t want to stress out over the lengthy application and loan-releasing process. Let’s see if we can find an online emergency loan option that fits your needs.
Personal Loans
A personal loan is a loan from a bank or other financial institution with a fixed payback term and monthly installments. Personal loans come with interest rates and fees, like any other loan product.
Due to the increasing number of internet loans and peer-to-peer lenders, borrowers can now choose from various quick and straightforward loan options, most of which can be completed within 10 minutes.
In most cases, once approved for a personal loan, the funds will be wired straight to your bank account.
Basic Requirements for Personal Loans
Although requirements for obtaining a personal loan vary per financial institution, most lenders center their decisions on the following criteria:
Credit Score: If your credit score is low, you may be perceived as a high-risk borrower. Lenders charge higher interest rates to minimize this risk, saving the best deals for individuals with the best credit rating.
Payment History: Lenders want some sort of guarantee that they will be repaid if they grant you a personal loan. Positive payment history will boost your chances of approval.
Income: Lenders won’t only ask about your credit history; they will also look into your income. In addition, they will make sure you have a reliable source of funds to repay your debt.
Debt-to-Income Ratio (DTI): Lenders will check your DTI to see what percentage of your monthly income is dedicated to repaying debts. To calculate your DTI by yourself, add together all of your minimum monthly debt payments and then divide that number by your gross monthly income.
Title Loans
People in urgent need of cash have found a quick solution in title loans. An asset like your car can be used as collateral for a loan.
Title loans are accessible to borrowers with poor credit because some creditors do not perform credit checks and may not even ask for proof of employment or income.
Basic Requirements for Title Loans
Application requirements and the approval process are straightforward. The majority of loan providers will require only a few additional pieces of information and documentation from you besides the title.
Proof of Income & Residency: Borrowers must show proof of income in the form of an employment contract, an annuity, a trust, or anything else that guarantees they’ll be able to fulfill their financial obligations under the loan terms.
You can provide a recent utility bill (electric, water, or phone) to verify your address.
Valid Proof of Identification: The financial institution you’re applying to must be sure you are a legal citizen of the country and have the right to borrow the money. Any official identification, such as a driver’s license or passport, is accepted.
Cash Advances
You can receive a short-term loan using your credit card to get a cash advance from a bank or an ATM. Although cash advances typically have high-interest rates and costs, their swift approval and quick funding make them appealing to borrowers.
Basic Requirements for Cash Advances
The Consumer Financial Protection Bureau (CFPB) notes that the standard requirements set out by cash advances lenders are as follows:
- The borrower must be at least 18 years old;
- Have an active checking account;
- Proof of Identity; and
- Proof of Income
Advantages of Online Emergency Loans
Online emergency loans guarantee prompt processing and loan release. Other advantages of acquiring online emergency loans include:
No Collateral Needed: Emergency loans are designed to provide short-term relief for unexpected expenses. In cases where the borrower’s credit history is excellent, most lenders will not require collateral. Title loans are the only ones that need collateral.
If you have made all of your monthly debt payments on time, you will likely have a high credit score, giving you an advantage when applying for online emergency loans.
Easy Payment Process: Emergency loans don’t only have a simple approval and release process but also an easy repayment process. The monthly payments for emergency loans are based on the borrower’s income and budget.
Moreover, emergency loans have a prearranged repayment plan that works for both the lender and the borrower. Therefore, emergency loans are the way to go if you need quick cash without losing track of your debt management.
Less Paperwork: Having no property to offer as collateral means you won’t have to fill out and submit any property-related paperwork. Instead, you only need to present essential paperwork such as proof of identity, proof of address, and proof of income.
Final Thoughts
You can apply for an online emergency loan from an online lender if you believe you can provide the necessary information and documentation. Find a reputable lending service to help you with reasonable rates and terms.
After you’ve been approved for an emergency loan, making timely payments is crucial so you can keep your favorable credit rating and have access to other loan options in the future.