Emergency Loans

Emergency loans offer quick finance for people needing money urgently. They are set up to help people quickly and will require a relatively quick repayment too. A borrower will have to go through credit checks to secure one and if they pass the money could be in their account by the next working day.

Table of contents

Written by Mark Grimley
Read time: ~5 mins
Published: 28th September 2023

What is an emergency loan?

An emergency loan is a financial lifeline designed to provide quick access to cash when you encounter unexpected expenses. It serves as a short-term solution to cover urgent financial needs until your next payday or when you regain stability. These loans typically have a fast application process, allowing you to receive the funds promptly, often within a few hours or the next business day.

How do emergency loans work?

Emergency loans work like any other loan, but are typically referred to as emergency loans due to their quick payout times if approved. Using the Choose Wisely Eligibility Checker you can quickly compare personalised loan options from a wide range of lenders. Once you choose a suitable option, you can directly apply with the lender and complete the loan process in minutes.

Where can I get an emergency loan?

When it comes to obtaining emergency cash loans, there are various options available. Here are a few options to consider:

  • Online Lenders & Comparison websites: Online comparison websites like Choose Wisely offer quick ways to compare loan options. By using our Eligibility Check service, you can compare loan options from multiple lenders and choose the one that best meets your needs.
  • Credit Unions: Some credit unions provide emergency loans to their members. These loans often come with favourable terms and lower interest rates compared to traditional banks.
  • Friends and Family: In some cases, reaching out to loved ones for financial assistance can be a viable option. However, it's essential to approach such situations with clarity and transparency to avoid any strain on relationships.

How can I get an emergency loan?

Getting an emergency loan is a straightforward process. Follow these steps to increase your chances of approval:

  • Assess what you actually need: Determine the loan amount you require and the timeframe in which you can repay the loan.
  • Research and compare: Use Choose Wisely or other trusted platforms to compare lenders and their loan options. Look for competitive interest rates, flexible repayment terms, and positive customer reviews.
  • Check eligibility: With Choose Wisely's Eligibility Check service, you can find out which lenders are most likely to accept your application without affecting your credit score.
  • Complete the application: Once you've chosen a lender, complete their application form honestly and provide any necessary documents.
  • Review and accept: Carefully review the loan terms, including interest rates, repayment schedule, and any fees. If you're satisfied, accept the loan offer.
  • Receive funds: After final approval, the lender will transfer the funds to your bank account, sometimes within hours or the next business day.

Can I get an emergency loan with bad credit?

Traditional lenders often rely heavily on credit scores, making it challenging for those with bad credit to secure loans. However, providers of emergency loans for bad credit will typically consider other factors, such as your income and what you can afford to repay, to assess your eligibility. Many lenders in the Choose Wisely panel specialise in providing emergency loans for poor credit.

How quickly can I get an emergency loan?

In urgent situations, time is of the essence. The speed at which you receive an emergency loan depends on various factors, such as the lender's processing time and if the lender requires more information about your application. In general, once approved, you can expect to receive the funds within a few hours or the next business day.

What are emergency loans for?

Emergency loans are designed to help you navigate unexpected financial crises. They can be used for various purposes, including:

  • Medical expenses: Covering unforeseen medical bills or treatment costs.
  • Vehicle repairs: Fixing sudden car breakdowns or unexpected repairs.
  • Home repairs: Addressing urgent repairs or replacing essential appliances.
  • Debt consolidation: Combining multiple debts into one manageable loan.
  • Unforeseen travel expenses: Dealing with unexpected travel costs due to emergencies or family events.
  • Temporary loss of income: Bridging the gap during a period of unemployment or reduced income.

What are the pros and cons of emergency loans?

  • Quick access to funds: Emergency loans provide fast access to the funds you need to address urgent financial needs.
  • Flexible eligibility criteria: Unlike traditional loans, emergency loan lenders often consider factors beyond credit history, increasing the chances of approval.
  • Bad credit-friendly: Even if you have a poor credit history, you may still qualify for an emergency loan.
  • Convenient application process: Comparing and applying for an emergency loan is typically all done online and so can be very quick and convenient.
  • Higher interest rates: Emergency loans may come with higher interest rates compared to traditional loans due to the short-term nature and increased risk for lenders.
  • Limited loan amounts: The loan amount available for emergency loans may be lower than what you could get with a secured loan or traditional personal loan.
  • Short repayment terms: Emergency loans often require repayment within a short period, so it's crucial to ensure you can afford the repayments on time.

Are there any alternatives to emergency loans?

Yes, several alternatives can help you address financial emergencies:

  • Emergency savings fund: Building an emergency fund over time can provide a safety net for unexpected expenses.
  • If you have a credit card with available credit, it can be a quick solution for small emergencies. However, be mindful of interest rates and repayment terms.
  • Personal loans: Traditional personal loans may offer lower interest rates and longer repayment terms compared to emergency loans.
  • Government assistance: Explore local government programs that offer financial aid or grants for specific emergencies.

Can I get an emergency loan if I'm unemployed?

While having a stable source of income increases your chances of approval, being unemployed doesn't automatically disqualify you from obtaining an emergency loan. Lenders consider various factors, such as your overall financial situation and alternative sources of income. If you receive benefits or have a regular source of funds, you may still be eligible for an emergency loan.

Can I get an emergency loan without a credit check?

Almost all lenders will conduct a traditional credit check. However, they will likely consider other factors, such as income and affordability, to determine your eligibility. However, it's important to note that these loans may have higher interest rates or stricter terms.

How long will I have to pay back an emergency loan?

The repayment term for an emergency loan varies depending on the lender and the loan amount. Typically, these loans have shorter repayment periods ranging from a few weeks to a few months. It's crucial to review the loan terms and ensure you can comfortably meet the repayments on time for the agreed period of the loan.

Emergency Loans FAQs

Can I apply for an emergency loan if I already have existing debts?

Yes, you can still apply for an emergency loan even if you have existing debts. However, it's important to consider your overall financial situation and assess whether taking on additional debt is the right decision for you. Ensure that you can afford the repayments without further straining your finances.

Will applying for an emergency loan affect my credit score?

The initial Eligibility Check process with Choose Wisely does not impact your credit score. However, when you apply directly with a lender, they may perform a hard credit check, which can have a temporary impact on your credit score, especially if you are declined. It's essential to make timely repayments on your loan to maintain or improve your credit score.

Can I repay my emergency loan early?

In most cases, yes, you can repay your emergency loan early. However, it's essential to check the terms and conditions of your loan agreement. Some lenders may charge early repayment fees, while others may allow you to repay the loan without penalties.

Can I get multiple emergency loans at the same time?

It is generally not advisable to take out multiple emergency loans simultaneously, as it can lead to increased debt and financial strain. Each loan comes with its own interest rate and repayment terms, which can become difficult to manage. It's important to assess your needs carefully and borrow responsibly.

Are emergency loans available for businesses?

Emergency loans primarily cater to individuals for personal financial needs. However, there are business loans and government schemes specifically designed to assist businesses during emergencies. It's advisable to explore business financing options tailored to your specific requirements.

Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.

Important Information.

All of the information in this guide is correct at the time of writing.

If you complete a loan search application on the Choose Wisely website, the rates shown may vary based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 13.9%APR to a maximum of 1721%APR Representative and loan repayment periods range from 3 to 60 months.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to moneyhelper.org.uk.

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
You can access your credit report for free from Credit Karma, Clearscore or Experian.

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk