How to Get a Safe Emergency Loan in 5 Steps

No one wants to deal with a financial crisis. But if you’re faced with unexpected expenses and don’t have enough money in your emergency fund to cover them, an emergency loan can help you get back on your feet. 

Emergency loans are a safe and affordable way to get much-needed cash for car repairs, medical bills, or major life events. Some lending platforms like Upstart offer emergency loans online, so you can get your money faster. 

What is an emergency loan?

An emergency loan is a type of personal loan designed to help you cover unexpected or urgent expenses. Sometimes called a hardship loan, it can be used for medical bills, car repairs, a broken appliance, or other costs that can not wait. Most emergency loans are unsecured, meaning you do not need to put up collateral to qualify, like your home, car, or investments.

Interest rates on emergency personal loans typically range from around 7% to 36% APR, depending on your credit profile, income, and the lender. Your rate will reflect how much risk the lender assigns to your application. Funds are often disbursed quickly, sometimes within one business day of approval, though timing may vary by lender. 

What can emergency loans be used for?

When most people think of an emergency loan, they usually assume the loans are meant for emergencies. In reality, most emergency personal loans are pretty flexible, which means you can use the funds however you want—with a few exceptions, like paying for college tuition or business expenses. 

Some of these common reasons for an emergency loan will sound familiar: 

• Medical expenses
• Veterinary bills
• Funeral costs
• Wedding expenses
• Rent, mortgage, or utility payments
• Car repairs
• Home repairs or improvements
• Vacation or travel expenses

Each lender may have different guidelines and restrictions, so do your research before you select a loan to make sure it meets your needs. 

Types of emergency loans

When it comes to emergency personal loans, you can take your pick from several options. Keep in mind that every loan won’t suit your needs, though. In fact, some could end up costing you more in the long run—or even increase your debt. 

Let’s explore some of the most common emergency loans.

Personal loans

A personal loan is a short- to medium-term loan with relatively fast funding. You can get an emergency personal loan from a credit union, bank, or online lender. You’ll usually need a credit score ranging from good to excellent to qualify for a personal loan with an affordable APR.

However, some online lending platforms like Upstart consider other factors when determining your emergency loan rates, like education² or employment. These details can help you qualify for a better loan even if you’re rebuilding your credit.

Cash advances

Credit card cash advances let you borrow against your existing credit limit. They are fast but tend to carry high fees and interest that begins accruing immediately, making them a costly option if not repaid quickly.

Payday loans

Payday loans are short-term, high-cost loans typically due on your next paycheck. According to the Consumer Financial Protection Bureau, the typical payday loan carries an APR of around 400%. These loans can trap borrowers in cycles of debt and should generally be avoided.

Auto title loans

Auto title loans use your vehicle as collateral. If you cannot repay, the lender may repossess your car. These carry significant risk and high costs.

How to get an emergency loan: 5 steps

After you’ve considered the different types of loans for emergencies, the next step is to apply for your loan. Get started by following these 5 simple steps. 

1.Make sure you’re eligible for an emergency loan.

At a minimum, most lending companies require you to be 18 years old with a regular income and active bank account to qualify for a loan. You’ll likely need to prove you’re a U.S. citizen or permanent resident to access funds, too. So gather your identifying documents, financial statements, and any other details before you begin the application process. Other factors lenders normally review when evaluating emergency loan application include:

Credit score: Most lenders have a minimum credit score requirement, though some lenders specialize in working with borrowers who have lower scores. A higher score generally means a lower interest rate.

Income and employment: Lenders want to see that you have a steady source of income to repay the loan. You may be asked to provide pay stubs, bank statements, or tax returns.

Debt-to-income ratio (DTI): Your DTI compares your monthly debt payments to your gross monthly income. A lower DTI signals to lenders that you can manage additional debt.

2.Compare lenders.

When you’re in a financial bind, it can feel tempting to go with the first lender you find. Still, take some time to consider a few options before signing on to a loan. Shop around for the best terms, including interest rates, repayment periods, and additional fees. Check for customer support reviews, too. While it may not seem important today, a good customer service team comes in handy if you run into issues down the road.

3.Prequalify for your loan.

If possible, try to prequalify for a loan before applying. When you prequalify, you can usually check personalized rates without impacting your credit score, since lending companies usually perform a soft pull at first. You’ll only be subject to a hard pull after you accept the loan. Hard pulls will appear on your credit report and can reduce your credit score by a few points.

4.Complete the application.

Make sure you fill out your application completely to prevent any delays. Double-check your personal and financial details, submit copies of tax information or pay stubs, and stay tuned for any additional requests throughout the approval process.

5.Review the loan terms before accepting.

This is another crucial step, even when you’re facing a stressful situation. Read the terms of your loan agreement carefully before accepting. Emergency loan providers know that borrowers need cash quickly, so unethical companies may inflate interest rates, add additional charges or services, or conceal details.

Pro tip: Perform a quick Google search to check for average interest rates, learn more about the fees included in your loan terms, and make sure you’re not dealing with a predatory lender. 

How to select an emergency loan

You have several ways to get an emergency personal loan, but they’re not always affordable, legitimate, or safe. It’s important to evaluate your options carefully to avoid an unaffordable or unfair loan. But most importantly, make sure it aligns with your needs and keep an eye out for details like timeline and costs. 

Timeline

If you’re in search of an emergency loan, you likely need your money as quickly as possible, which could eliminate potential loan providers, including banks or credit unions. If that’s the case, look for online lenders that offer an easy application process and same-day or next-day funding. 

Costs

You know how much money you need to cover your current expenses, but have you considered the long-term costs of your loan? Depending on factors like your credit score, the loan term, and additional fees, you could get stuck with an unaffordable loan. 

To reduce the risk of defaulting on your loan, use a personal loan calculator to input the loan details. You’ll get a more realistic look at your monthly payments and discover how much you’ll pay in interest before you sign on the dotted line.

Eligibility requirements

You’ll have to meet certain guidelines to get a loan. Before you spend time applying, check each lender’s credit score and income requirements. For example, some lenders require borrowers to have credit scores over 620 or a minimum income to get approved. If you know your score is lower or you don’t quite meet the income threshold, you can focus your efforts on other companies.

Some lenders and marketplaces, including the Upstart, consider additional factors such as education² and employment history alongside credit score, which may help borrowers with limited credit history qualify.

Can I get an emergency loan with bad credit?

If you’re trying to rebuild your credit, you may feel like your chances of qualifying for a loan are slim to none. We’ve got good news for you! 

Typically, you can get an emergency loan even if you have poor or nonexistent credit. In some cases, your interest rate might be higher and you may only be eligible to borrow up to a certain amount. Still, an emergency personal loan with a 35% interest rate is more affordable than a payday loan. 

You can improve your chances of qualifying for an affordable emergency loan, too. First, take some time to boost your credit score in the short term by asking for a credit limit increase, making timely payments, and checking your credit report for incorrect information. 

Next, consider securing your personal loan with collateral in exchange for a lower rate or asking a trusted, financially stable friend or family member to co-sign on your loan. If they have a higher credit score and income than you do, you could get a better interest rate. 

Is an emergency loan safe?

The safest emergency loans share these characteristics:

• Licensed and registered in your state: Verify the lender is registered with your state’s financial regulatory authority.
• Full APR disclosed: Reputable lenders show you the full cost of the loan upfront, not just the monthly payment.
• No approval guarantees: Be cautious of any lender that claims to approve all applicants without a credit review. Responsible lenders assess your ability to repay.
• No high-pressure tactics: A trustworthy lender gives you time to review your loan agreement and never pressures you to sign immediately.
• Secure application: Make sure the lender’s website uses HTTPS and that you are not being asked to share sensitive information over email or text.
• APR below 36%: Consumer advocates widely regard 36% as the upper threshold for an affordable loan. APRs above that level can make repayment very difficult.

If something feels off, whether it is an upfront fee before funding, an unusually high rate, or a lender you cannot verify, trust your instincts and look elsewhere.

Alternatives to emergency loans

Don’t think an emergency loan is right for you? Depending on your circumstances, you may be better off with another option, especially if you only need a smaller amount of cash or want to avoid high interest rates. 

If that’s the case, consider one of these common alternatives to emergency loans:

• Credit cards. You may qualify for a 0% APR credit card, especially if you have a solid credit score. You can use the credit card to pay your bills, then repay the balance during the card’s interest-free introductory period. These grace periods usually last 12 to 18 months, giving you ample time to pay down smaller balances. Just make sure you don’t add to the balance and create more debt in the process.
• Repayment plans. Medical bills can feel crushing, especially if you have insufficient insurance coverage. Fortunately, many hospitals and clinics can work with you to create an affordable, potentially interest-free, payment plan. You may also be able to reach a settlement agreement. If so, the hospital will reduce your total costs in exchange for some money down.
• Nonprofit organizations. Many nonprofit organizations exist to help people through a financial crisis. Some may even connect you with a local lending circle or a group of individuals that work together to raise money for certain needs.
• Loans from family members or friends. Asking your friends or relatives for money can feel uncomfortable. But if you’re willing to push through the awkwardness, you could save hundreds in interest rates and fees. You’ll also skip the paperwork and approval process, which means you could get your money faster. Pro tip: Transfer the money you’d save in interest into a high-yield savings account and start your emergency fund to cover unexpected expenses in the future.
• Credit unions. Last, you may be able to borrow emergency money from a local credit union. But be aware that the timeline is usually longer than an online lender. You may also need to be a member in good standing to receive a loan, especially if you have a lower credit score. 

Need cash fast? An emergency personal loan can help

Finding the best urgent loan for your needs isn’t easy when you’re faced with an untimely repair, medical crisis, or costly event. Still, knowledge is power, especially when it comes to your financial future. 

Getting familiar with the different types of emergency personal loans and learning how each one works can help you avoid illegitimate loans, save money, and manage your current situation. At the same time, you’ll be better prepared for the future—and better able to plan for the unexpected.

Frequently Asked Questions

What credit score do I need to get an emergency loan?

There is no universal minimum. Many online lenders work with borrowers across a wide range of credit scores. Borrowers with higher scores generally receive lower APRs and better terms. Some lenders, including those using alternative underwriting models, may consider factors beyond credit score, which can help borrowers with limited credit histories qualify.

How fast can I get an emergency loan?

Funding speed varies by lender. Some online lenders may approve and fund a loan within one business day of receiving a completed application and all required documents. Others may take two to five business days. Same-day funding is possible with some lenders but is not guaranteed.

Can I get an emergency loan with bad credit?

Yes, it’s possible, but not guaranteed. Some lenders specialize in working with borrowers who have lower credit scores or limited credit histories. You may face higher interest rates and lower loan amounts, but qualifying may still be possible. Prequalifying with multiple lenders lets you compare offers without affecting your credit score.

Are payday loans the same as emergency loans?

No. Payday loans are a specific type of short-term, high-cost loan typically due on your next payday. Emergency loans more commonly refer to personal installment loans, which have fixed monthly payments and repayment periods ranging from one to seven years. Personal loans are generally much safer and more affordable than payday loans.

Are emergency loans safe?

Emergency loans from licensed, reputable lenders are generally safe. The key is to verify the lender’s credentials, read the full loan agreement before signing, and avoid lenders that promise guaranteed approval, charge upfront fees, or do not disclose the full APR. Loans with APRs below 36% from licensed lenders are typically the safest option.

What happens if I cannot repay an emergency loan?

If you miss payments, the lender may report the delinquency to the credit bureaus, which can lower your credit score. The account could eventually go to collections. Contact your lender as early as possible if you anticipate difficulty; many lenders offer hardship programs or modified repayment options for borrowers who reach out proactively.

Can I get an emergency loan if I am unemployed?

It may be possible, but it is more difficult. Lenders want to see a reliable source of income to ensure you can repay the loan. Some lenders may accept alternative income sources such as unemployment benefits, Social Security, disability income, or freelance earnings. Review each lender’s requirements before applying.