Understanding Emergency Loans
November 28, 2022 | News | No Comments|
As hard as we try, there is only so much we can do to avoid emergency striking. Whether it be an out-of-network medical bill or car accident requiring you to make a high deductible payment, things can quickly spiral financially.
Luckily, there are options out there to help get you the money you need on short notice, hopefully pulling you out of any further headaches. So, what exactly is an emergency loan? More than anything, it’s a broad term that encompasses the term emergency which can apply to just about anything. You can usually get an emergency loan from a traditional bank or online lender, sometimes with an immediate turnaround.
While these can seem like an appealing option during a time of need, the reality is that you don’t want to take out one of these loans unless you have to. That’s because the fees associated with an emergency loan is much higher than a traditional option. These high-interest rates and fees are inflicted because these short-term lenders know that a person who is looking for an emergency loan is in a difficult situation and because they don’t have many options, will pay the high fees.
So while an emergency loan may seem the best option in the moment, carefully consider if there are any others. Just because you’re in a tough spot does not mean you should have to pay unjust fees to pay afloat. Here are some other emergency options for you to consider:
Credit Cards and Cash Advances
Credit cards and cash advances can be a good option during an emergency. While the interest rates may be higher than a traditional loan, the approval process is much quicker, and you don’t have to go through a formal application process. You can also get a small cash advance from your credit card company if you need money fast. Keep in mind that you will need to pay back the amount you borrow plus any associated interest and fees.
Payday loans are similar to emergency loans in that they are a short-term loan with high fees and interest rates. Payday loans are typically for small amounts of money and are due to be paid back when you get your next paycheck. Generally, these loans should be avoided as they can easily lead