Life happens, and when it does, how many of us are prepared to take on an expense of $400 or more at the drop of a dime? Flat tire? Maybe. TWO flat tires? For a lot of us, not so easy.
We know the importance of having a "rainy day" savings account, something separate from the "vacation fund" account of course. What do we do when it's depleted?
We can't control when life throws you a curve ball. But when it does, a personal, emergency loan could potentially be the best option to get cash in your hand the soonest possible. Before you start desperately filling out loan applications, however, let's look at the pros and cons.
1) For one thing, personal loans can be super flexible, making them useful for many reasons. Emergency loans can be especially flexible when it comes to paying them. Loan terms are in months (12, 24, 48, etc) with extended terms typically meaning a lower payment. Keep in mind though that the longer it takes you to pay back ANY loan, the more you typically pay in interest.
2) Personal loans don't require any type of collateral. In a pinch, you can get yourself a personal loan and not worry about having to give up your home, for example, if you happen to default. However, if you are confident you can pay it back, you might want to consider a secured personal loan for better interest rates.
3) The application process typically is quicker than most other loan types. They also require less documentation. Most reputable lenders even offer online applications making it a lot more convenient to apply.
1) Since unsecured loans are based on credit and ability to repay, the interest rates tend to be a little higher than those loans backed by an asset. Obviously the better your credit, the better the rate. During an emergency, you might not have enough time to shop around for a good rate, this is why repairing and rebuilding credit is crucial when it's NOT necessarily needed; this way you're prepared for when you DO need it.
2) Since these types of loans are risky for lenders, they tend be a lot more picky about who they lend to. There are many factors that affect whether or not you get approved including: (mainly) your credit score, credit history, income, and your total debt.
3) If someone is considered higher risk for this type of loan, lenders might limit the amount being borrowed. Fortunately there are plenty of ways of improving your credit score to avoid limiting your borrowing power.
In a time of crisis, an personal emergency loan might be your best bet. Weigh out the pros and cons however it makes most sense to you in your current situation and be sure to understand the terms and conditions to ANY agreement before signing.
Find a reputable lender who can offer you advice and explain every step of the application process to you.
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PersonalLoans.com offers a wide range of options that can help you find funding from anywhere between $1,000 and $35,000. They'll shop for you within their network of lenders and find the best rate and term for what you need it most, whether it's home improvement, debt consolidation, medical expense, or anything else. The application process is simple, easy, and in most cases, once you're approved, your funds are available the next business day!They serve people of all credit types and continue to be one of the best when it comes to providing excellent customer support.
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