What to do when you have inadequate rainy funds? Does that call for a funding alternative? For pressing necessities, you cannot rely on any random loan opportunity but instead on something that promises quick disbursal of funds.
The best thing is that you can obtain emergency loans from a direct lender. This way, you can fetch the necessary funds without facing a lot of hurdles. Besides, these lenders do not impose complex requirements and believe in flexible lending opportunities.
Picking the right emergency funding option should depend on a few aspects that every borrower must cross-check before taking the plunge.
Nature of the purpose – You might be looking for a substantial loan to pay off a huge bill. In that case, you cannot expect to get respite from the problem by getting a financing option that promises to offer a small amount of loan. Therefore, understanding the purpose is important.
Qualifying criteria – Once you confirm the purpose, next check if you fit the lender’s criteria. Otherwise, applying for loans will be a waste of time for you. The general requirements might be the same but some additional criteria might vary from lender to lender.
Affordable rates – Loans invite additional expenses such as interest, but that should be affordable. This is the beauty of applying with a direct lender, as they can offer loans on the spot without charging unreasonable interest rates that are beyond your budget.
Type of emergency loans accessible in different situations
Check out the different ways of obtaining emergency money during a crisis.
1. Personal loans
These loans should rightly be called all-rounder loans as they are capable of serving different types of purposes. Solving emergency problems with speedy cash is one of the intrinsic properties of a personal loan.
| Advantages | Setbacks |
| 1. Receive money in a snap after successful approval. 2. Obtainable with or without collateral. 3. Pocket-friendly interest rates for convenient borrowing. 4. Repayment spread over a longer duration. | 1. Interest rates might rise because of your circumstances. 2. You pay more money because of the lengthy repayment term. 3. Additional fees might depend on your lender. 4. Surplus fees add up because of late repayment. |
2. Pay check advance
You can ask your employer to offer an advance amount from your pay check. Once they agree, the specified amount will be deducted from your future earnings. However, you will receive the amount outright just when you need it.
| Advantages | Setbacks |
| 1. The advance amount might be interest-free depending on your employer. 2. You can take advantage of this facility with the help of apps. | 1.The amount will be extracted from your salary. 2. You cannot think of getting a considerable amount of advance. |
3. Loans from relatives or friends
At times, applying for loans is not the best option, given your financial situation. However, there is no other way you must fetch loans but rather from your near and dear ones. Let them be aware of your situation so that they can get ready to offer financial assistance when you are pressed for cash.
| Advantages | Setbacks |
| 1. You can get funds at low or zero interest rates. 2. Speedy money with flexible conditions to return. | 1. This type of situation oftentimes complicates the relationships within the family. 2. It might invite tax implications for the lender. |
4. Credit card advances
Maybe, you are not familiar with this functionality of a credit card. Some of them facilitate you to obtain cash advances during emergencies. The process of fetching funds is quite streamlined and does not take much time to complete.
| Advantages | Setbacks |
| 1. You can get the cash advance that adds up to the ongoing credit limit. 2. No separate verification of credit history is necessary. | 1. Interest rates will be high when you draw out additional money from your card. 2. The limited amount will be accessible to you. |
5. Instalment loans
These loans let you borrow money as soon as possible with an instalment facility. Therefore, the repayment need not have to happen within a single month. The payments will spread over months, thereby letting you repay conveniently without putting too much strain on your finances.
| Advantages | Setbacks |
1. The loan price is not going to be unbearable. 2. No collateral is needed for these loans. | 1. The overall payment you ultimately make will be more since you will have to pay interest over months. 2. Late payments can affect your credit scores. |
6. Title loans
You can make the most out of the current value of your vehicle which can be your car, to get loans from a direct lender. These loans are short-term financing options, and the term for repayment should be extended to one month. Hard credit checks are not part of this lending process.
| Advantages | Setbacks |
| 1. Quick money using the value of your car. 2. Eligibility criteria are not complex. | 1. Your car will be the security to let you borrow money when in need. 2. Failure to repay on time might result in loss of assets. |
7. Payday loans
These loans are unsecured funding options and are perfect for someone looking forward to plugging the gap between paydays. They are available in small amounts, and thus, you can get them after a speedy decision. Use the next paycheck to repay the loan debts.
| Advantages | Setbacks |
| 1. Any salaried person can qualify for these loans. 2. Repaying loans is easy with the next salary check. | 1. Interest rates will remain high due to easy accessibility. 2. Repayment can be stressful. |
8. Payment plans
For urgent necessities, a payment plan can be an alternate way to get access to emergency cash. In case of any pending bill, you can discuss your concerns with the provider for an extension or no-interest payment scheme.
| Advantages | Setbacks |
| 1. You can get interest-free payment plans. 2. The provider might offer multiple repayment schemes. | 1. An additional fee might be charged. 2. Opportunities are limited. |
The bottom line
You must be aware of the different options that can serve any urgent financial needs like yours. Emergencies can be of different magnitude and you cannot seek the same way to overcome them. The nature of the requirement is one of the detriments to deciding which option should go well with your situation.
Roscoe Tanner
Roscoe Tanner is the Editor-in-Chief, leading a large team of writers at LoansForever. He has expertise in writing for various borrowing options like personal loans, long-term and short-term loans, unemployed loans and many more. Roscoe joined LoansForever in 2015 but previously worked with many reputed loan companies. He performs the major role as the editor, covering key aspects of loans and finance. Roscoe Tanner wants to serve at large in the progress of the company and to present a modern alternative to the traditional financial industry in the UK. He is a Certified Financial Planner and has a god-gift of connecting with people through his valuable suggestions and writings. His expertise as a writer and editor in the finance industry is based on his education qualification. Roscoe has done a Master of Business Administration (MBA) in Finance.
