What is an emergency loan?
Emergency loans provide the money you need very quickly, provided you pass credit checks. They are usually small in size and have a short repayment period as well. This type of instant loan is designed for people who need help in unexpected emergencies, for example if you have to repair damage to your home.
Emergency loans differ from long term loans and bank loans, which you might have to apply for in person and wait a long time to receive. Instead, it’s possible to receive an emergency loan within a short time period. This means you can have the funds in your bank account quickly. How quick depends on your bank account provider and the lender's speed of paying out.
Emergency Loans Bad Credit UK
There are other types of emergency cash loans that borrowers can apply for, these include payday loans and advance cash loans. With this variety, there are usually some loans that suit a borrower's needs better than others. It is important to get the best deal possible, so here at Choose Wisely, after filling out a simple form with us, we do the research and find the loans you are eligible for. Some direct lenders also offer emergency loans for bad credit in the UK, so if your credit history is not great, there is still the possibility you can qualify for one of these loans.
What are emergency loans for?
Flexible loans don’t have restrictions on them, or set criteria for using the money. The funds are yours to spend within reason but you’ll have to provide the lender with a purpose. It’s advisable to only use a loan like this in a real emergency.
Some reasons people might take out an emergency loan in the UK are:
- Repair water damage from a leak
- Fix a window that’s broken from a child’s football
- Cover unexpectedly high household bills
- Resolve issues with unpredictable cash flow
- Cover the costs of health related treatment (eg. unexpected vet bills)
For whatever reason, a person could end up in a horrible position where their savings, credit card, or another form of finance is not able to cover this new expense.
The common theme to these reasons is that they are costs which hadn’t been planned for and it’s not possible to postpone this expense until the borrower gets their next paycheck. If a person doesn’t have any savings there aren’t many options to pay for these expenses. This is why emergency loans can really help some people. If you are experiencing financial difficulties such as struggling to keep up with your monthly bills and payments, or need to repay another loan, getting an emergency loan isn’t the answer. You should speak to a financial advisor, money advice service, or local debt charity to get help with debt management and guidance out of your situation.
Where can I get emergency loans?
You have some different ways in which to get an emergency loan. You can go to a traditional high street lender and apply online or in a branch. There are also many specialist lenders who provide emergency loans, who focus on providing the cash to your bank account quickly.
How to get emergency student loans?
It doesn’t matter what your current situation is, whether you are a student, unemployed, self employed, or a business owner, you can apply for an urgent loan. The eligibility criteria are listed here:
- You must be at least 18 years old
- You have to be a UK resident, with a permanent UK address and proof of address
- A regular source of income - you must have a way of reimbursing the loan and will be asked to provide details of your income and expenses
- Agree to a credit check, you will be analysed with both an affordability assessment and credit check.
- You cannot be bankrupt, if you have recently filed for bankruptcy, an emergency loan won’t be issued to you.
Applying for a non credit check emergency loan
It is not possible to get an emergency loan without a credit check. The Financial Conduct Authority calls for credit checks to keep the market safe and secure. This is among other things to protect people from illegal and immoral lenders, who create high cost repayment plans and tend to increase people’s debts.
For some people looking for an emergency loan, no credit check lenders might seem like the answer but they are likely not FCA authorised, which puts you at risk. If a person does have a bad credit history, there are now other factors lenders take into consideration when deciding on a person’s loan application. These factors mainly focus on a person’s current situation and if they can repay the loan within the repayment period. This means they could still be eligible despite a poor credit score.
Alternatives to emergency loans
If an emergency loan isn’t quite right for you, there are other alternatives to look at. The first of these are credit line products and overdrafts. These are continuous forms of credit that you use to borrow funds. You can borrow up to your credit or overdraft limit and repay in multiple transactions. You only pay for these funds if you actually use them.
Another alternative to look into are budgeting loans. This is a new type of loan brought in by the UK government to replace the DWP crisis loan initiative. Like the crisis loans of the past, DWP emergency loans can help with a range of unexpected and household costs. For more information about government emergency loans you can go to the government website to find out about eligibility, loan amount, repayment, and the application process.
Emergency Loan Repayments
Before you decide on an emergency loan, consider how you will pay back the full amount and interest. Are you able to do it within the repayment period? Also, will the extra cost of repaying the loan cause financial problems in the future? If you are late on payments, there can be a negative impact on your credit score, so think carefully before taking out a loan.
Everyone at some point in their lives needs a bit of help financially, which is why emergency loans are such a popular loan type in the UK. If you could do with some guidance to find the right emergency loan you can apply and compare UK direct lenders to take back control of your finances with Choose Wisely.
Emergency loans FAQs
If you are in need of money fast, you often won’t have the luxury of low interest rates you might get when you get a longer-term loan at your bank. Emergency loans are therefore often fairly expensive and you need to ensure you can meet monthly repayments before taking out a loan. When ou compare loans on Choose Wisely, you will be shown what the full repayment amount is before you apply with a direct lender.
As the name says, the idea behind an emergency loans is that you get cash in your bank account quickly. A few different factors play a role in whether it takes a few hours, days or a week to get the cash in your bank account. Those factors are the need for your loan, the size of the loan, the lender you apply with and how quickly you can provide the documentation needed.
It is not uncommon for life events to happen that can leave you short of cash by the end of the month. There are some things you should not get a loan for, these include money needed for longer-term projects such as house improvements or buying a brand new car. In addition, it is very unwise to get an emergency loan to pay off another loan or facilitate debt consolidation.