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Emergency loans are personal loans designed to help cover unexpected expenses such as medical bills and last-minute home repairs. Personal loans allow you to take out a lump sum of money and pay it back in monthly installments. But because these loans are intended for immediate needs, they tend to have higher interest rates than other types of loans.
Bankrate outlines the best personal loans for emergencies based on interest rates, terms and features each lender offers. We also explain how to find and apply for an emergency loan, the types of emergency loans that are available and the pros and cons of taking one out.
If you decide that an emergency loan is right for your situation, you would follow these steps:
1
Determine how much you need.
Calculate how much money you need, and factor in any origination fees that may be deducted from your loan proceeds.
2
Check your credit score.
The higher your credit score, the better APR you'll receive. Consider a co-signer if you have fair or bad credit for more favorable rates.
3
Get prequalified.
This lets you check your rates with multiple lenders without hurting your credit score.
4
Compare rates and loan terms.
Look at a variety of lenders, including banks, credit unions and online lenders to see which offers you the best deal.
5
Complete the application process.
You’ll need to submit documents such as pay stubs, tax returns and personal identification.
It is a good idea to compare several lenders before deciding on one. When looking for an emergency loan, consider the following:
1
Approval requirements
Each lender has its own requirements for loan approval. They consider your credit score, debt-to-income ratio and overall financial health. Some lenders consider things like area of study and job history. If you have below-average credit, it’s a good idea to look for lenders with lower minimum credit requirements or that allow joint applications.
2
Interest rates
The lowest advertised interest rate is never guaranteed, and emergency loans tend to carry higher interest rates than regular personal loans. Make sure to incorporate any added fees the company charges when calculating your interest rate.
3
Loan amounts
Make sure the lenders you consider offer the amount of money you need to borrow. Some lenders offer loan ranges better suited for small purchases, while others offer loans up to $100,000.
4
Repayment options
Personal loan lenders typically offer several different repayment term options. If you are borrowing a larger sum of money, it makes sense to choose a longer repayment period to decrease your monthly payment. If you take out a smaller loan, a shorter repayment period makes sense to cut down on the overall interest.
5
Unique features
Keep an eye out for perks offered by lenders, such as interest rate discounts, unemployment protection, introductory APRs and online financial tools.
6
Customer service
Different lenders provide different levels of customer service. If you are more comfortable with in-person service, make sure to choose a lender that offers that. Many lenders have online chat features and daily customer support phone hours.
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*Trustpilot TrustScore as of December 2022. Best Egg personal loans, including the Best Egg Secured Loan, are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender or Blue Ridge Bank, a Nationally Chartered Bank, Member FDIC, Equal Housing Lender. “Best Egg” is a trademark of Marlette Holdings, Inc., a Delaware corporation. All uses of “Best Egg” refer to “the Best Egg personal loan”, “the Best Egg Secured Loan”, and/or “Best Egg on behalf of Cross River Bank or Blue Ridge Bank, as originator of the Best Egg personal loan,” as applicable.
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APRs presented are estimated and were created based upon information entered by the consumer and through analysis of information publicly available at Prosper.com. The estimated APR presented does not bind Prosper. The range of APRs available through Prosper is 6.99% to 35.99%. Only borrowers with excellent credit qualify for the lowest rate available. Your actual APR depends upon credit score, Prosper Rating, loan amount, loan term, credit usage and history. All loans are subject to credit review and approval. All personal loans made by WebBank, Member FDIC. For example, a two-year $10,000 personal loan would have an interest rate of 11.5% and a 4.00% origination fee for an annual percentage rate (APR) of 15.64% APR. You would receive $9,600 and make 24 scheduled monthly payments of $468.40. A three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A four-year $10,000 personal loan would have an interest rate of 11.50% and a 5.00% origination fee for an annual percentage rate (APR) of 14.27% APR. You would receive $9,500 and make 48 scheduled monthly payments of $260.89. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 1%-5%. Personal loan APRs through Prosper range from 6.99% to 35.99%, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $50,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. **You may receive your funds one business day after your acceptance of the loan offer, completion of all necessary verification steps and final approval. One business day funding is also dependent on your bank’s ability to quickly process the transaction.
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You must apply for this offer and continue to meet the criteria used to select you for this offer. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). OneMain charges origination fees where allowed by law. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $500. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Visit omf.com/loanfees for more information. Maximum APR is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z such as college, university or vocational expenses; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
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Bankrate's guide to choosing the best emergency loan
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When shopping for an emergency loan, compare APRs across multiple lenders to make sure you’re getting a competitive rate. Also look for lenders that keep fees to a minimum and offer repayment terms that fit your needs.
Loan details presented here are current as of the publication date. Check the lenders’ websites to confirm information.
Overview: If you need money immediately and have good credit, you can try Best Egg; the company has a quick prequalification, application and approval process.
Why Best Egg is best for emergency loans for good credit: With Best Egg, you can check your rate and apply for a loan within minutes, making it ideal for those who need money fast. The company offers personal loans to people with credit scores of 600 and above, so it's able to keep APRs low for higher credit scores.
Pros
Quick application process
Wide range of loan amounts
No prepayment penalty
Cons
Origination fee
Only two repayment options
Loan amounts vary by state
Who it’s for:
Borrowers with good credit that may qualify for the lowest rates
Borrowers who need the funds in less than a week
Lender perks:
Free financial resources
Soft credit pull to check your rate
Option to change due date
Fees:
Origination fee of 0.99% to 8.99%
$15 late payment fee
$15 returned payment fee
Time to receive funds: Within one to three business days after approval.
Overview: If you don’t have stellar credit (or much credit at all), an Avant loan can come in handy.
Why Avant is best for emergency loans for fair credit: Avant's low credit score requirements makes it easier for those with less-than-perfect credit to qualify for its loans. You can get approved within minutes and get the funds as soon as the next business day.
Pros
No prepayment penalty
Low minimum credit score
Range of repayment terms
Cons
High minimum APR
Origination fee
No co-signers allowed
Who it’s for:
Borrowers with fair credit
Borrowers looking to finance a small or midsize expense
Lender perks:
Range of customer support hours
Get approved in minutes
Credit app available
Autopay
Fees:
Administration fee of up to 4.75%
$25 late payment fee
$15 dishonored payment fee
Time to receive funds: Next business day after approval.
Requirements:
Borrowers must submit checking or savings account details.
Overview: Not everyone has excellent credit. Sometimes people with little credit history — or those with a few negative marks on their records — need to borrow money. LendingPoint is available to those borrowers in need.
Why LendingPoint is best for emergency loans for bad credit: LendingPoint's minimum credit threshold of 600 means that those with less-than-stellar credit can qualify for one of its emergency loans. The company’s loans also feature flexible repayment terms and loan amounts to fit many circumstances.
Pros
No prepayment penalty
Quick funding
Low minimum credit score
Cons
High APR rate caps
No co-signers allowed
Origination fee
Who it’s for: Borrowers with less-than-perfect credit who need quick cash.
Lender perks:
Mobile app
Prequalification available
Autopay
Fees: Origination fee of up to 8%.
Time to receive funds: Next business day after approval.
Overview: OneMain's loans are best for people who need to borrow only a small amount. It offers loans of as little as $1,500 and caps loan amounts at $20,000.
Why OneMain Financial is best for emergency loans for small loan amounts: While some lenders have a minimum loan amount requirement of $5,000, OneMain Financial allows you to borrow as little as $1,500. This alone makes its loans good for smaller emergency expenses, such as minor car repairs.
Pros
You may be asked for collateral
Accessible to low credit borrowers
Low minimum loan amount
Cons
In-person branch visit required
High APR rate caps
Origination fee
Who it’s for: Borrowers who only need to borrow a small amount.
Lender perks:
7 days to cancel without penalties
Apply and get approved in under 10 minutes
Physical branches
Online account management
Fees:
Origination fee of 1% to 10%
Late fee of $5 to $30 or 1.5% to 15% of your payment
Not-sufficient funds fee of $10 to $50
Time to receive funds: Same day after closing or within 2 business days, depending on the disbursement method.
Overview: Upgrade's emergency loans feature low credit score requirements and flexible repayment terms of up to seven years.
Why Upgrade is best for emergency loans for fast funding: If you don’t need to borrow much money but still need money fast, an Upgrade loan might be best for you. Personal loans start at $1,000, and the money can be sent to your bank within one business day.
Pros
No prepayment penalty
Rate discount if you have an Upgrade checking account
Allows joint applications
Cons
High origination fee
Late and returned check fee
High APR rate caps
Who it’s for:
Borrowers with fair to excellent credit that need quick cash
Borrowers looking to fund a small to midsize expense
Lender perks:
Change your payment date
Loyalty and autopay discounts
Prequalification available
Fees:
Origination fee of 1.85% to 9.99%
Late payment fee of up to $10
$10 returned check fee
Time to receive funds: Next business day after approval.
Requirements: Lender verifies your overall financial health.
Overview: Borrowers with good credit will find low APRs with Upstart, starting at just 6.70 percent.
Why Upstart is best for emergency loans for a range of loan amounts: Upstart offers loans ranging from $1,000 to $50,000, which can serve multiple purposes. Besides that, the lender takes into account more than just your credit score when you apply for a loan, serving consumers from all financial backgrounds.
Pros
Quick funding
Accessible for low credit borrowers
Option to change payment date
Cons
Origination fee
Only two repayment options
High APR rate cap
Who it’s for:
Borrowers with little-to-no credit or low credit scores
Borrowers with good to excellent credit that qualify for the lowest rate
Lender perks:
Check your rate in 5 minutes or less
Those with insufficient credit may apply
Online financial resources
Fees:
Origination fee of up to 10%
Late payment fee of of 5% of the past due or $15, whichever is greater
$15 check refund fee
$10 paper copy fee
Time to receive funds: Next business day after approval
Requirements:
Have a full-time job or a job offer
Not have adverse credit history
Meet debt-to-income ratio requirements
Have a U.S. bank account
What is an emergency loan?
Emergency loans are personal loans that are used for unexpected expenses, such as medical treatment or a car breakdown. Compared to other types of loans, emergency loans may have high interest rates.
There are different types of emergency loans with their own unique features. Oftentimes, they are made for a few thousand dollars and can be disbursed within a few days. Some emergency loan lenders even disburse funds on the same day as approval, making it easier to address urgent needs.
Who are emergency loans good for?
If you need fast cash to cover an emergency expense, an emergency loan may be a good option. If your air conditioner breaks down in the middle of summer you can receive the money you need with an emergency loan to repair it as soon as possible.
Once the repair is made, you'll be able to have the flexibility to pay the loan back in installments. Likewise, emergency loans may be a lifesaver if you've suddenly lost your job and could use some extra cash to pay your bills.
Personal loans are a good option for emergencies because they can be disbursed quickly, sometimes within the same day of approval. They can also be less expensive to use than credit cards — while many credit cards have interest rates upwards of 20 percent or more, the average personal loan interest rate hovers below 11 percent, and good-credit borrowers can score rates as low as 6.5 percent.
Best for: This option works best for borrowers who can meet the lender’s approval requirements. In addition, it might be best for those who are in a financial position to score the lowest interest rate.
Home equity loans
Home equity loans and home equity lines of credit (HELOCs) are less common for emergency uses since they're typically slower to disburse funds. However, they will usually offer the lowest rates since they're secured by your home.
Best for: Home equity loans and HELOCs are best for borrowers who have enough equity in their homes to meet the lender’s qualifications — typically at least 15 percent to 20 percent. If you can afford to repay the loan and avoid having your home foreclosed on, this might be a good emergency option.
Credit card cash advances
Your credit card company may extend you a short-term loan in the form of a cash advance. This type of loan is one of the fastest ways to access money, but the interest rates and fees can be sky-high.
Best for: A cash advance can be a good option for borrowers who can’t wait until the next day to receive funds from a personal loan. It could also be useful if you can repay the debt within a few months, but be mindful of potentially high interest rates.
Payday loans
Payday loans are short-term loans that don't require a credit check and will typically need to be repaid by your next payday. Payday loans are extremely risky and not recommended; they charge triple-digit interest rates and high fees, and failing to make payments could send you deeper into debt.
Best for: This type of loan is best used as a last resort for borrowers who can’t qualify for a loan with a lender who has a lower maximum interest rate.
How do emergency loans work?
Many lenders don't advertise specific "emergency loans" because an emergency loan is just a personal loan. If you need to take out a personal loan for emergencies, your best bet is to find a lender that advertises fast approval and fast funding for a loan amount that suits your needs.
Once you've gotten quotes from a few lenders, you'll send in your application to the one with the best interest rate and terms. You'll likely need to provide identity and income verification during this stage of the application process. Once you're approved, funds can be sent directly to your bank account.
If you need an emergency loan, be cautious of lenders that might be out to scam you or at least take advantage of your difficult time. Pay attention to:
No credit checks: A loan that does not require a credit check may be attractive for someone with poor credit, but these lenders often mitigate their risk by charging exorbitant APRs.
Repayment terms: If possible, avoid payday loans. These types of loans require you to make payments in full by your next paycheck, often with triple-digit APRs. Longer repayment terms not only give you more time to pay back your emergency loan, but will also decrease your monthly payment.
State registration: Not all lenders are registered in every state since states set their own loan requirements. Before you apply, make sure your potential lenders are registered in your state.
Up-front fees: A company that promises loan approval regardless of your credit and requires up-front fees might be running an advance-fee loan scam. This is when scammers collect money that’s supposedly for processing applications but never issue any loans.
What can emergency loans be used for?
Generally, personal loans do not have restrictions on what you use it for. Lenders typically have a few rules about things you can't use the money for, such as gambling or for illegal activities. Otherwise, you can generally use your loan money for whatever you want.
Because emergency loans don't have rules about what you need to use them for, you could get a loan for situations like the following:
Broken home appliances
Hospital bills
Household expenses
Medical bills
Vehicle repairs
While you can use an emergency loan for nearly anything, make sure that you only borrow as much as you need and what you can repay.
Pros and cons of emergency loans
Pros:
You can use the funds on just about any emergency expense.
You may get the money very quickly, sometimes the same day you apply.
You can split a big-ticket expense in manageable, monthly payments.
Cons:
You’ll have to pay a high interest rate, which can increase the overall cost of your loan and steer you into a cycle of debt.
You may have to settle for a smaller loan amount than you want.
Your credit score will suffer if you don't make your payments.
How to choose an emergency loan
When you need money in a pinch, it's easy to jump to the lender with the lowest advertised APR. However, it's usually best to compare personal loan offers from a few lenders before committing to one. When comparing lenders, look for features like:
Minimum credit score: One way to decide if a lender is right for you is to check its eligibility requirements. If you can't meet the credit score minimum on your own, see if the lender allows co-signers; adding someone with good credit to your loan may increase your chances of being approved.
Time to receive funds: If you need your money right away, see how fast your potential lender will fund your loan. If it’s not within a day or two, or if funding requires a visit to a local branch, you may want to explore other options.
Fees: Aside from your principal balance and interest rate, what fees does the lender charge? In addition to late fees and prepayment penalties, look out for origination fees, which are often deducted from your total loan amount.
Prequalification: If you don’t have great credit, look for a lender with a prequalification option. This lets you see if you’re eligible for the loan through a soft credit check, which won't ding your credit score as a hard credit check would.
What is the easiest loan to get?
The easiest loan to get is not always the best loan. For instance, payday lenders will approve loans quickly and without checking credit, but their risk is often not worth the benefit.
Instead of searching out these types of lenders, look for emergency loans from reputable banks, credit unions and online lenders. Many of these lenders list their credit requirements on their websites, and most offer prequalification — meaning you can easily apply and see if you'll be approved within minutes and without damaging your credit score.
How to get an emergency loan with bad credit
If you’re having trouble qualifying for an emergency loan due to a lack of credit history or less than stellar credit, you may have better luck with these options.
Credit union payday-alternative loan. Some federal credit unions offer small loans that give members an alternative to a traditional payday loan. The loan is capped at $2,000, the loan term ranges from one to 12 months and the maximum interest rate is 28 percent. To qualify, you must be a member of the credit union or eligible to apply for membership.
Secured personal loan. A secured personal loan is a loan that has collateral attached to it, such as a car title or cash account — the asset secures the loan. Since this type of loan is less risky for the lender, you may find that it’s easier to qualify for. Just keep in mind that if you fail to repay the loan, the lender has a right to take your collateral.
Apply with a co-signer or co-borrower. A co-signer is someone who agrees to repay your debt in case you default on the loan or miss a payment. Having a co-signer or co-borrower can help you qualify if they have better credit or more income. When you apply with a co-borrower, you and the other person agree to repay the loan together.
Banks and credit unions can offer several advantages in rates and loan terms, but their loan processes tend to take longer than other options. If you need money right away, you may not have the time to wait.
If you need money quickly, an online lender may be your best option. Some lenders offer immediate, same-day or next-day approval. Even if the funding isn't available on the same day, several offer funding within a day or two.
The variety of the options also means you can shop around to find the best rates and loan terms for you, and you can likely find an option no matter what your credit score is.
Emergency loan alternatives
Not everyone has a solid credit history to take out an emergency loan. If your credit score is holding you back or you otherwise don’t qualify for the lenders listed above, there are emergency loan alternatives.
Local credit unions and banks: Our best emergency loans above consist mostly of online lenders. If you belong to a local credit union or a bank, reach out to see if you qualify for a personal loan. Both options are friendlier toward current account holders, and you may have an easier time accessing a loan.
Local nonprofits and charities: Some states and local municipalities have grants or interest-free loans you can take advantage of when you’re in a pinch. Try calling 211 and explaining your financial hardship to get matched up with resources in your area. You might also qualify for state or federal relief.
Payment plans: Instead of paying a sum of money in full, ask if you can set up a payment plan. Whether it’s for an old medical bill or a credit card, lenders will usually work with you on alternative repayment. Try to do this as soon as you can; the longer you wait, the less likely it is that they’ll be willing to help you.
Paycheck advances: If you’ve been at your job for a while, consider borrowing money from your future self and asking your employer for a paycheck advance.
Loan or hardship distribution from your 401(k) plan: If you have a 401(k) through your job, you may want to ask about a 401(k) loan or about taking money out of your 401(k) for hardship assistance.
Help from family and friends: If you don’t qualify for an emergency loan or you don’t feel comfortable taking out a loan, ask friends and family for a little extra cash. If you don’t need to borrow a lot of money, they might be more willing to help you out. Some may let you pay them back whenever you can, and they may not charge you interest. No matter your situation, get your agreement in writing so you know what’s expected from both parties.
Early withdrawal from a bank CD: Taking money from a CD before it matures will cost you a penalty equal to the interest earned over a certain number of months, but with current interest rates so low, the amount could be negligible.
Building an emergency fund
While it might be too late to stash money away in case of an emergency right now, you can take some steps to build up your emergency fund in the future.
See where your extra cash is: Review your budget and see where to make cuts. Look at how much you spend on groceries or other line items that have flexibility, like dining out or monthly subscriptions. Anywhere you can find extra cash, put it into an emergency fund.
Open a high-yield savings account: Use any account that has access to funds when you need them. A high-yield savings account doesn’t have as much return as investing in the stock market, but you also don't risk losing money.
Open CDs with staggered maturity dates:Bank CDs usually pay slightly more interest than high-yield savings accounts, and you can set them up so that every few months, you have one that reaches maturity. If you need to, you can also pay the early withdrawal penalty to access the money.
Set up autopay: If you put money into your fund whenever you can, you’re already doing great. But take it a step further and automate your savings. Paying yourself first means you don’t think of yourself last.
Make mini goals: A good financial goal is to have at least six months’ worth of expenses or six months’ worth of your salary saved up. But that can seem daunting if you’re just starting out. Instead of looking at the bigger number, take the time to establish goal checkpoints. For instance, save up $1,000 as quickly as you can. Then save up one month’s worth of expenses. Then two, and so on.
Replenish as necessary: If you need to dip into your emergency fund to cover unexpected costs, go for it! That’s what it’s there for. But remember to build your funds up again when you’re financially able to.
FAQs about emergency loans
Taking out a loan always causes your credit score to dip a bit at first, but as long as you make your monthly payments on time, your credit score will not be permanently damaged. Making on time payments can actually improve your credit score over time.
Getting a loan can be more difficult if you don't have a job. Lenders want to make sure that you can repay what you borrow. If you have other forms of income, you might still be able to qualify. If you can't qualify for a loan on your own when you are unemployed, you may need to look for a lender that allows co-signers or co-borrowers.
Funding time depends on the individual lender. Some lenders distribute funds the same day you apply, while others may take a few days. While most online lenders offer funding within a week of applying, slower institutions can take up to a few weeks.
Methodology
To select the top emergency personal loan lenders, Bankrate reviewed and scored 32 personal loan lenders across three main categories: availability, affordability and overall customer experience.
Our selection of lenders feature relatively low fees, flexible loan amounts, fast funding and flexible repayment terms. Additionally, they offer perks, like prequalification tools, autopay discounts, mobile account management and a range of customer service hours, that enhance the overall borrowing experience.
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