A Bankrate survey found that over half of U.S. adults— 57 percent — wouldn’t be able to cover $1,000 emergency expense using their savings. This can leave many searching for an emergency loan if an unexpected cost comes up.

Emergency loans can be found in the same places borrowers would seek out traditional loans like banks, credit unions and online lenders. They all carry benefits and drawbacks, so shop around to find the best emergency loan for your needs.

What are emergency loans?

Emergency loans are a type of personal loan that borrowers can use following a crisis of some sort, such as medical bills or important home repairs. They tend to be small and are funded within days.

Where can I get an emergency loan?

When searching for an emergency loan, these are the most common places you can get one from:


One of the first sources to consider when looking for an emergency loan is a bank. This is especially wise if you have a longstanding relationship, as history could mean more competitive rates an potentially better terms.

What to look out for

The main benefit of signing off with a bank is the assurance of a reputable establishment and better rates if you have a history with the organization. Though, the funding timeline may be longer than if you secure a loan with an online lender. This is also a great option for those that prefer a brick-and-mortar institution, as many banks offer in-person assistance.

Credit unions

Credit unions are another choice you can explore when looking for an emergency loan. Just like banks, they’re reputable institutions that will offer you fair terms and interest rates on the amount borrowed. However, credit unions may be a better option than banks for those with less-than-perfect credit, as they tend to have more lenient credit and income requirements.

What to look out for

The advantage of getting an emergency loan with a credit union is that they tend to offer competitive rates and terms for their members, even if your credit isn’t in mint condition. But just like banks, funding timelines may be longer compared to those of online lenders. Additionally, you’ll need to be a member of the institution in order to apply for a loan, something that’s not required by most banks or online lenders.

Online lenders

The process of securing an emergency loan online is fairly simple and likely only requires you to fill out some personal information from the comfort of your home. Taking out your loan online will also allow you to compare different loan options all at once.

What to look out for

The standout feature of getting an emergency loan from an online lender comes down to the speed of funding. If you find yourself in a precarious financial situation and need money as soon as possible, an online lender is your best bet. While some lenders have same-day funding, the majority at least have funding available within a few business days of approval.

Payday lenders

Payday loans are a type of instant loan that allows borrowers to gain access to a small sum of money. These risky loans can carry interest in the triple digits along with large hidden fees, which is why they should only be considered as a last resort.

What to look out for

While these types of loans can be tempting for those who need money quickly, they are not a recommended route. The likelihood of defaulting on these types of loans is very high, which could mean more financial headaches in the future. If you have to take one, make sure you can pay it off when it’s due.

Types of emergency loans

There are eight primary types of emergency loans that those in need can secure. Each option has different uses and eligibility criteria.

Just as with any loan, not all emergency loans are created equal. Some carry special features such as customer support or more competitive interest rates. Consider the types of emergency loans outlined when determining which is best.

  • Personal loans. Received as a lump sum and paid back each month, personal loans can be found at banks, credit unions or other financial institutions online. They’re usually unsecured, meaning there’s no collateral required and have fixed interest rates, making payments predictable.
  • Credit card cash advances. These are available to cardholders in good standing but the amount available varies by the card company. And the fees are higher than a normal APR.
  • Payday loans. These should only be used in an extreme bind and offer a small amount of money in a fast amount of time.
  • Title loans. These loans use your vehicle as collateral and can give you fast access to cash. Though they can lead to vehicle repossessions, so only sign off if you can confidently pay off the loan within its term, usually 30 days.
  • Home equity loan or home equity line of credit (HELOC). Depending on the value of your home, you can use it as collateral and receive lump-sum funding or a line of credit.
  • Payment plans. Best for a large or unexpected bill, some accounting departments will allow you to negotiate a deal that allows you to stretch out the time you pay off the expense.
  • Paycheck advance. Just as it sounds, this allows you to get your paycheck sooner than usual. Depending on employer policies you could get cash sooner if an emergency comes up.
  • Friend or family member. This option is wise for those with strong connections as it can become complicated. Agree upon payment schedule ahead of time to avoid any issues.

How to choose the best emergency loan

The key to getting the best emergency loan comes down to doing your homework ahead of time. Look out for the following factors if the time comes to apply for an emergency loan.

Credit score

Your credit score is used as your measure of risk to lenders. So if your credit score falls on the lower end you may not receive the most favorable terms. Consider this when applying for emergency loans, for example, focus on fair and poor credit lenders if your score is not in tip-top shape.

Repayment terms

Consider the terms that each lender offers and how it fits into your ability to pay back the loan. While it can be tempting to sign off on a long-term loan with a smaller monthly payment, it can mean more interest in the long run. Instead focus on being able to afford a doable monthly payment to reduce the time you have to pay.

Interest rates

Overall available APRs are based on macroeconomic influences outside of our control, so some of your qualifying rate comes down to what the lender offers. When shopping for an emergency loan pay close attention to APR to try and lock in the most competitive rate. If your credit is lacking, the APRs follow suit. But remember that paying on time and in full will help build your credit over time.


Your budget should serve as your map when it comes to spending. Take the time to examine your current spending so you sign off on a loan that you can truly afford. Even more, keep up with your budget throughout the lifetime of the loan.

The bottom line

Sometimes unexpected expenses come up, an emergency loan can help you out of your situation so you can focus on what matters most rather than the finances that come along. Each type of lender carries a different set of benefits and drawbacks. It’s best to compare lender offerings and shop around, even when you’re in a hurry.