Emergency Cash Loans
Introduction – Emergency Cash Loans
Emergency loans refer to those types of loans that are usually taken for a short duration, aka short-term loans. You can borrow a small number of funds from your lender with the condition to pay back within a short time.
Most lenders usually require borrowers to pay off the debt within 30 days, while some provide up to 60 days. Emergency cash loans are mostly suitable for students, unemployed, or people with a bad credit score.
Emergency loans usually consist of three main types:
- Payday loans
- Emergency personal loans, and
Payday loans are the primary type of emergency loans. Amongst the three options, payday loans are the simplest ones with minimal approval requirements. You can borrow funds up to $1000. Payday loans also have lower interest rates, as compared to a personal loan.
Emergency personal loans are good for availing loans of up to $15,000. But, they usually have higher fees and interest rates.
Lastly, installment loans are intermediate between personal and payday loans. In such cases, lenders allow you to pay off the debt over time. The time frame that lenders usually provide under such cases ranges from 90 days to up to 7 years as well.
These installments also include both monthly as well as interest rates.
Emergency cash loan requirements
Emergency cash loans usually have little to no requirements, unlike applying for other conventional loans where lenders perform a thorough check on your credit history.
But, nonetheless, lenders will conduct some fundamental checks to ensure your loan request is legitimate. In most cases, however, your credit score won’t be affected.
The basic requirement for applying for emergency cash loan include:
- You must be of at least 18 years of age. But, usually, a person aged above 21 is considered more eligible.
- You should have at least $800 monthly income. However, if you are looking to apply for a more substantial personal loan amount, a monthly income cap of $2000 (pre-tax) is considered more suitable.
- You should have an active bank account.
- A valid ID proof
- A valid monthly income proof (usually a pay stub will be enough)
Note: If you maintain good credit scores (ideally above 600), it will help you obtain personal loans at a much more improved interest rate.
So, try to maintain a high credit score, especially if you want to burrow a significantly large emergency personal loan.
Benefits with Emergency Cash Loans
Fast and easy cash loans
The primary benefit of payday loans (of course) is that it helps you obtain fast cash for extreme emergency purposes. Unlike other forms of the conventional loan system, the process involved in getting your loans approved for payday loans is very easy and straightforward.
So, if you are in need of some urgent cash to pay your rent or to stock up your groceries, payday loans provide the simplest answer to help you do the same.
Usually, when you go knocking the doors of lenders to help you with some financial assistance, the list of requirements they ask for is absurd. The most prominent requirement (of course) is your credit score.
However, payday loans have minimal requirements. Lenders usually do not care for your bad/no credit scores, unless you’re applying for emergency personal loans.
You can easily apply for emergency payday loans even with little to no credit scores. Usually, the only eligibility criteria that lenders ask for is a valid ID proof and regular monthly income.
Protects your credit rating
Usually, when you are late for paying your bills, it affects your credit ratings in a very adverse fashion. It lowers your credit score, and that, in turn, reduces your chances of getting your loans approved in the future.
Payday loans help you burrow emergency funds for paying out emergency bills before the due date, thus protecting your credit ratings from decelerating.
Saves you money in the long run
Payday loans help you obtain fast cash to allow you to cover emergency bills without pilling up all the small payments. Paying your bills on time can help you avoid facing inconveniences such as bounced checks or bank overdrafts, which can affect your credit score in a negative way.
Helps you to be independent
t’s safe to assume that you will not always have the luxury of having sufficient cash in your hands, especially if you are a student or self-employed. In such cases, payday loans help you cover your loans without having to seek help from your parents or friends.
Risk Involved With Emergency Cash Loans
Look! Payday loans are usually of low value (up to $1000), which is not substantial compared to other conventional loans. But, nonetheless, it is a loan, no matter how little the amount may be.
So, you would have to consider that before applying for a payday loan recklessly.
Emergency payday loans are short-term loans, which means you get loans only a limited duration. In addition, you also get only a limited time window to repay the debt (unless you opt for an installment loan).
So, if you need loans for a considerable number of months, payday loans do not help.
Only small fund transfer
Payday loans are only good for covering some small emergency bills, usually up to $1000 only. Of course, you can apply for higher amounts by taking emergency personal loans, but the process becomes complicated again.
So, unless your fund needs are extremely limited, payday loans are usually not sufficient.
Involves interest rates and fees
Due to their considerably easier nature, payday loans usually come with higher fees and interest rates as compared to traditional bank loans. So, you may end up shelling out some extra cash in the long run.
Although the list of requirements is quite moderate, you still have to be at least part-time employed and should have a valid bank account as well. Not to forget, the recommended eligible age is 18 or above.
Emergency cash loans come in extremely handy when you run into any type of incalculable situations requiring immediate cash. Payday loans in specific are known for their low decision time.
However, there are also some risks involved in emergency cash loans. So, make sure you evaluate all its pros and cons before jumping into any type of conclusion.