An emergency loan is a type of loan that one can use in unseen financial crises. These loans are unsecured and come in different kinds like personal loans, payday loans, cash advance loans, credit card loans, and pawnshop lawns. They can be used to resolve any personal emergency and do not require any collateral.
An emergency loan is deposited directly into the borrower’s account, on a short notice of a day or two. According to the Federal Reserve of America, 40% of the Americans are unable to cover an emergency of even $400. It shows how helpful an emergency loan can be. Here are six benefits of applying for an emergency loan.
- Quick Processing Time
Unlike other necessary loans, emergency loans have a speedy processing time. Some banks take less than an hour to process the loan request. That is why this kind of loan is ideal for medical and other types of personal emergencies. In some cases, the application process can take a little longer than usual, but that usually happens when there is an issue with the applicants’ documents or some other aggravation.
- No Need for Collateral
Most emergency loans don’t require any collateral. It means that you can get the required money without having to offer any assets as security. However, there are a few emergency business loans that do require some collateral, but if you are someone who does not have any assets to offer, you can always look up for other options online.
- Credit Score is not an Important Requirement
When it comes to emergency loans, lenders do not care much about the credit score of the applicant. The reason for this is because, in this case, your credit score only dictates the interest rate you pay against the money you are borrowing, unlike other loan requirements where a good credit score is necessary to qualify for the loan. An emergency loan helps in making your credit score better. If you do not have the right credit score to be eligible for a loan, an emergency loan can help you in improving that score.
- It’s Convenient
Another great thing about an emergency loan is that it is highly convenient. From applying for credit to processing and interaction, everything proceeds online. There is no requirement for the applicant to book an appointment with a loan officer or to contact anyone to inquire about the process. Everything is easily accessible online. There are no limitations on how you are supposed to spend the cash, and you can use it for paying for medical bills, utility bills, car payments, or even premiums. Once your loan has is approved, the money gets wired directly into your bank account.
- Few basic Requirements
Emergency loans require very few necessary information for you to apply and qualify for them. The whole idea is to make these loans easy and accessible so one can rely on them in their time of need. There are no detailed requirements, and all one has to show is that they have a sound and regular source of income. Some emergency loans require little information like a checking account and proof that you are a permanent resident of the state you are currently living in.
- It Helps Cover Unexpected Bills
There are times when you are getting into a situation where you desperately need extra money to cover your bills and other expenses. At this time, an emergency loan comes in handy, because it helps you get through such financial crunches. For instance, you have unexpected bills, and your paycheque is far away. An emergency loan can help you clear your dues in time without having to worry too much.