Can I get an emergency loan?

What is an emergency loan?

An emergency loan is money you can borrow quickly when you need help right away. You might need this money for surprise bills, fixing your car, or paying for something important that can't wait.

Emergency loans work like other loans, but you can usually get the money faster.

The term ‘emergency loan’ can be used to describe various loan types, but due to the quicker application process, is usually in reference to certain personal loans. This means you do not need to secure the loan to anything (such as your home) in order to be accepted.

You can find emergency loans from banks, credit unions, online lenders, and even some shops that offer loans. Each one has different rules about how much you can borrow and how quickly you'll get the money.

You borrow the money, and then you pay it back over time with extra money called interest. Interest rates tend to be higher than other loan types, so it’s important to factor this in when deciding whether an emergency loan is right for you.

It’s important to remember that due to the typically high rates charged with these loans, they should only be used for genuine emergencies, and when you know you can pay them back within their relatively short terms.

How to get an emergency loan

1. Consider if it is an emergency – If it can wait, you may be able to get better rates with traditional personal or secured loans.
2. Check your money situation - Look at how much money you need and how much you can pay back each month.
3. Look at your credit score - This is like a report card that shows how good you've been at paying back money in the past. You can check this for free with the three main UK credit reference agencies, Equifax, Experian and TransUnion.
4. Compare different loans - Look at different lenders to find the best deal. Check things like:
   How much interest you'll pay
   How long you have to pay back the loan
   Any extra fees
   How quickly you'll get the money
5. Fill in an application - You'll need to give some information about yourself, like:
   Your name, address, and date of birth
   Your job and how much money you earn
   Your bank details
6. Get approved - The lender will check your information and decide if they will lend you money.
7. Receive the money - If you're approved, the money will go into your bank account, usually within a few hours or days.

Remember, it's important to only borrow what you need and make sure you can pay it back on time. Where possible, use an eligibility checker first (which just conducts a soft search) so you don’t cause damage to your credit score before applying.

How fast can I get an emergency loan?

Emergency loans are designed to get you money quickly. Many online lenders can approve your loan within 24 hours. With some banks and credit unions, it could take up to 3 days, especially if you're a new customer.

Things that might slow down your loan:

• Applying outside of banking hours (evenings, weekends, bank holidays)
• Missing information on your application
• Problems verifying your identity
• Issues with your bank accepting the transfer

To get your money as quickly as possible, make sure all your information is correct and apply during normal working hours.

Where can I get an emergency loan with bad credit?

If you have bad credit, it means you've had trouble paying back money in the past. This can make it harder to get a loan, but you still have options:

• Credit unions - These are local lending groups that often help people with lower credit scores.
• Online lenders - Some online lenders work with people who have bad credit.
• Guarantor loans - These loans need someone else (like a family member) to promise to pay back the loan if you can't.

Be careful with payday loans or doorstep loans. These often charge very high interest (sometimes as much as 1,250% APR), which means you end up paying back much more than you borrowed.

Should I get an emergency loan?

Emergency loans can be helpful in tough situations, but they're not always the best choice.

Good reasons to consider an emergency loan:

• Fixing your car when you need it for work
• Paying for urgent home repairs like a broken boiler
• Covering essential costs
• Paying an important bill that can't wait

Reasons to think twice:

• Buying things you want but don't need
• Paying for holidays or luxury items
• Covering regular bills - this might mean you need help with budgeting
• Paying off other loans - this can create a debt cycle

Before getting an emergency loan, ask yourself:

• Can I borrow from family or friends instead?
• Do I have savings I could use?
• Can I delay the expense until my next payday?
• Am I eligible for any benefits or grants?
• Can I get an interest-free overdraft from my bank?

Remember that emergency loans often have high interest rates. This can mean you'll pay back a lot more than you borrowed. Only take out an emergency loan if you're sure you can make the repayments on time.

Alternatives to an emergency loan

A traditional loan may not always suit your needs, so you may want to consider one of the following:

• Credit card - Existing credit cards offer instant access to funds with potentially lower interest rates and flexible repayment options.
• Overdraft - Overdrafts from your existing bank often have lower interest rates and no application process for pre-approved limits.
• Universal Credit budgeting advance - If you get Universal Credit, you might be able to get an advance on your benefits.
• Local council support - Some councils offer crisis loans or grants that you don't have to pay back.

If you're worried about money, you can get free help from places like:

• Citizens Advice
• MoneyHelper
• StepChange

Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.