When an emergency happens, whether it’s major home repair or an issue with your vehicle, it can be a nightmare. It’s even worse if you don’t have the money to cover it.
Many people can’t wait days or weeks to come up with the money for a car repair. What is a person supposed to do?
Emergency loans for bad credit are the best way to get the money you need in a short amount of time. There are many different types available.
It doesn’t matter if you have stellar credit or horrible credit. If you’re in a fix and need money fast, then check out these options.
1. Installment Loans are Popular Emergency Loans for Bad Credit
Banks and several online lenders offer installment loans that give you the money you need and can pay off over time. This is ideal for any unexpected expenses that cost a significant amount of money such as home repairs that you can’t pay back in a few weeks.
The amount varies on your income, credit score and other factors, but can be as little as $1,000 or as high as $35,000.
Also, the amount of time to pay the money back, as well as the interest rate, depends on several factors. These include the amount of money borrowed and your credit score.
You pay small personal loans back quickly, but banks draw out higher borrowed amounts over several years. Loans amounts for those with bad credit likely won’t be as high as people with good credit and have higher interest rates.
2. Short-Term Loans for Small Amounts
When the amount is small, then you can try for a short term loan. These payday loans online are for small amounts between $100 and $500. You pay these loans back within a few weeks or month and pay a high-interest rate.
Instead of making many payments, you make a single or a few payments that include interest. The biggest downfall of these loans is the high interest rates. If you are unable to make the payment, then you’re hit with another month of high interest and other potential late penalties.
If you’re looking for a small loan that lasts until your next paycheck, then this may be an option.
3. Credit Cards for Emergency Loans
Credit cards are a popular way of paying for bigger ticket expenses if you don’t have the cash on hand. Many people have a credit card set aside for emergencies and break them out when needed. If you don’t have a credit card, then you can apply for one and get accepted.
It may take a few days for the new card to get to your home. If your credit isn’t great, then the limit won’t be high, such as $250 to $500. As this is a credit card, it will have a high interest rate, so it’s important to pay off the balance as soon as possible.
If you are late or default, then it can have a negative impact on your credit score.
4. Home Equity Line of Credit: Revolving
If you own your home or have paid on it for many years, then you might have access to a home equity line of credit. As you pay down the loan on your house, you earn equity. For example, if the original loan was for $200,000, and you’ve paid $50,000 of the principal, then you have $50,000 equity in the home.
After you’ve accrued enough equity, then the bank allows you to borrow off that equity through a home equity line of credit. You’re given a limit and you can borrow up to that limit at any time. If you have an expense that costs $5,000 and you have $10,000 line of credit, then you can still borrow another $5,000.
The only caveat is you must pay back the amount you borrowed with a monthly payment. If not, then it could impact any further borrowing from the home equity line credit.
5. Home Equity Loan: Lump Sum
A home equity loan is like a home equity line of credit in that it involves the equity in your home. The main difference instead of a revolving loan, it’s given to you in a lump sum. This is ideal for any large-scale repairs, expenses, etc.
Once you receive the money, it becomes a regular installment loan. There is a set number of payments at a set interest rate. Unless you want to have a lot of money sitting in your bank account, this loan should only be for higher-end projects and expenses. The home equity line of credit used for variable expenses.
6. Payday Loans for Emergencies
If the need is immediate and you don’t have any other options, then you can try a payday loan. Payday loans are like short term loans. Payments revolve around your paycheck instead of any specific time.
If you need $300 and you get paid in four days, then the payment due date is in 4 days. If you get paid in two weeks, then the payment date is in two weeks.
Keep in mind the farther out the pay date, the higher you’ll pay in interest.
7. Debt Consolidation Loan for Bad Debt
A debt consolidation personal loan no credit check has a specific purpose. It isn’t used for unexpected expenses, but for existing debt such as credit cards and medical expenses.
If you are behind on bills and are close to being sent to collections or are already there, then a debt consolidation loan can help.
You provide a list of your debtors and the amounts. The loan processor provides the funding to pay off those debts. and then you have one loan to pay instead of several payments. It helps ease your debt burden and can help improve your credit score.
8. Peer-to-Peer Loan with Investors
When it comes to bad credit loans, peer-to-peer are new to the game. The way a traditional bad credit personal loan works is you apply at a specific lender and the lender provides the funds. All funds come from the same lender.
With a peer-to-peer loan, you apply for a loan and a series of investors decide to put money into that loan. If you needed $500, then five investors could provide $100 each.
You pay the loan back and the investors get a piece of that payment until you pay off the loan and interest. You get the money and they get their investment back plus interest.
Which Loan is Best for You?
It’s not easy to deal with emergencies when you don’t have the cash. These emergency loans for bad credit can help get you out of a jam. Emergencies come in all shapes, sizes, and costs, but there should be an emergency loan that fits your needs.
If you’d like to learn more about what financial options are available to you, explore our site. Here are some other articles you might find interesting:
Payday loans with a prepaid debit card – how to get one when you only have a debit card
Your guide to online installment loans instant approval
Pros and cons of Payday loans
How to find the best bad credit loans guaranteed approval