Best Emergency Loans for Bad Credit

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Financial emergencies come in many shapes and sizes. Perhaps your car breaks down, and the repairs you need to get it back on the road are expensive. Other financial emergencies could stem from a job loss, an illness, a funeral, or any number of unexpected circumstances. If you’re facing one of these situations without enough savings to get through it, and you need to borrow money in a hurry, an emergency loan could help you cover the cost.

Finding the right loan can be stressful when you need fast access to cash, but if you have the added complication of bad credit, getting an emergency loan may seem impossible. Fortunately, that’s not the case. You may still have emergency loan options even if you have credit problems.

Guide for Choosing the Best Emergency Loans for Bad Credit

Do You Qualify for an Emergency Loan If You Have Bad Credit? 

Having bad credit doesn’t mean you can’t qualify for an emergency loan. Rather, you’ll need to be able to show that you have income sufficient to repay the loan, usually measured by your debt-to-income ratio. Plus, your credit reports will need to show that whatever caused your bad credit score has been resolved (e.g., you’re not delinquent on any of your loans and you’ve resolved any tax liens or other judgments.)

If your credit issues haven’t been resolved or you don’t have enough income to repay the loan on your own, then you might consider applying for an emergency loan with a co-applicant. This is because you’ll be able to rely on your co-applicants good credit history rather than your own to get qualified. If you choose this option, make sure to repay the loan or you could damage your relationship with your co-applicant. Remember, delinquencies will affect their credit scores.

Comparing Emergency Loan Lenders for Bad Credit

When considering an emergency loan, some of the most important factors to consider include how much the loan will cost, the terms you can get, and how quickly you can apply and get funded. Some of the most important factors to consider when comparing emergency loan lenders for bad credit are:

  • How much the emergency loan will cost. The cost of an emergency loan is made up of the interest rate you’re charged and the fees you’ll pay to get the loan. A loan’s APR, or annual percentage rate, represents the sum of these two costs. For this reason, the APR is the most useful cost to evaluate when comparing lenders.
  • What terms you can get on the loan. Before choosing a lender, ensure it offers the repayment terms you need. Shorter repayment terms will result in higher payments since you’ll pay the loan off more quickly. This means you’ll also end up paying fewer interest charges over time. Look for a lender that offers the shortest repayment term you can comfortably afford.
  • How quickly you can apply and get funded. It’s also important to evaluate how easy it is to apply for the loan and how quickly you’ll get funded. These two factors are often related since lenders that offer an easy online application process may also offer fast funding. Many of the best lenders offer approval in minutes and funding in as few as one to three business days (sometimes even the same day).

How to Apply for an Emergency Loan if You Have Bad Credit

Before applying for an emergency loan, first gather your personally identifiable information (e.g., Social Security Number, date of birth, address), income information, and details about the funding you need (e.g., loan amount and purpose). This will make the application process easier, as lenders will require you to provide this information.

You’ll usually submit a preliminary application with basic details to see if you can qualify, which won’t affect your credit if the lender uses a soft credit check. The lender will tell you if you can qualify and the rates and terms you might be able to receive. If the rates and terms are acceptable to you, you’ll proceed with the full application. A hard credit inquiry will be performed, which will affect your credit scores, and you may need to provide additional documentation, like pay stubs or bank statements.

If you’re approved for a loan, you’ll need to review and accept the final loan terms. Then, the lender will send you the funds in the manner specified in your application. For instance, depositing the funds into your checking account or disbursing the funds directly to your creditors. Finally, you’ll need to set up your account via an online portal or mobile app so you can manage your loan.


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