No matter how wealthy or financially prepared you are, there will always come a time where you will need immediate financial assistance. As a matter of fact, financial emergencies take place the moment you least expect them to happen. In time like these, people usually apply for emergency loans. What if you have bad credit? Will it be possible for you to take the loan? The answer is a big yes.
What is an emergency loan for?
To pay for electricity, water, rent, and other utility bills.
To take care of sudden health emergencies and medical bills.
To handle bail or even death related expenses.
Credit card payments
In situations like these, waiting for help is not a good idea. The best thing to do is to take immediate action.
What is a bad credit emergency loan?
Emergency loans are offered to individuals who urgently need cash. There are a lot of lenders offering emergency loan for people with a not so perfect credit score. The other terms for bad credit emergency loan are:
Hard money financing
Second chance borrowing
Through bad credit emergency loans, people with bad credit can borrow cash the moment they need it the most. This type of loan belongs to a short-term loan category, so the process would be a lot easier. Once your loan is approved, you will be receiving the money within 24 hours. As a matter of fact, some lenders release the money in just a few hours. The good thing about bad credit emergency loans is that they will not take into account your credit report. Also, a bad credit emergency loan application is easier and has a very high approval rate.
How to qualify for this type of emergency loan?
You should be employed for at least a year.
Should be 18 years old and above.
Unemployed individuals are also welcome as long as they can secure a document that proves that they have a steady and stable income.
You should be able to present a proof of income or record of monthly earning.
You should have a valid and active bank account for the past three months to six months.
Why is bank information important?
Bank information is needed because the lender will send the money through your bank account. Aside from that, the lender will receive your payment through bank as well. You should repay the amount within the given period of time. In case of delinquent payment, the lender has the full right to deduct what is owed from the bank account.
How much is the total amount to be borrowed?
If you meet all the aforementioned qualifications, then the lender will automatically send the amount to your bank account. How much money can be borrowed? Basically, you are allowed to borrow $100 up to $10,000. It actually depends on the lender that you are working with.
As mentioned above, emergency loans for people with bad credit belongs to the short term loan category. Hence, you should repay the amount within one to three months. The repayment terms and options vary, depending on the terms and conditions of the lender. So make sure you read the terms and conditions before signing the contract.
Repayment schemes for an emergency loan
These loans are indeed helpful in times of financial emergencies, but there are some downfalls associated with it. Such type of loan has higher interest rate and the percentage charged varies depending on the total borrowed amount. It is actually the consequences of a hassle free loan. If you are going to search around, you will find out that there are a lot of lenders who are willing to offer bad credit emergency loans.
The interest rate and repayment schemes vary from one lender to another. So it would be a wise idea to compare various money lenders so that you will be able to meet the lender that offers the lowest interest rate and flexible repayment options.
You can find a lot of lenders online. Through online research, you would be able to compare various lenders and be able to choose the one that’s favorable to you. Before signing up any agreement, you have to carefully read the terms and condition to avoid any complications.
Also, did you know that this type of loan can be a perfect opportunity to repair your credit score? If you repaid the loan within the stipulated period of time, the lender can actually consider you for future emergency loan funding. The lender will keep track of your payment habit and will report it to the credit bureaus.
However, you need to be very careful when dealing with the loan. Too many loans can make you susceptible to a debt trap. This will put you in a very challenging situation wherein you need to keep up with the payment from various lenders. There is a higher possibility that you will not be able to keep up with the payment. Hence, you should use bad credit emergency loan the smartest possible way to avoid any complications.
Is there an alternative to emergency loan?
The only alternative to emergency loan is by being financially prepare. You need to save money so that you will have something to use in times of financial emergencies. It’s all about spending less and saving more. Unfortunately, only a few people are doing this thing. Although bad credit emergency loan can help you in times of financial trouble, it would still be best if you are financially prepared.
Are there any risks involved?
An emergency loan has a higher interest rate than other types of loan. Because of your bad credit score, the lender automatically considers you as high risk borrower. So to make sure that you will keep up with the payment within the stipulated period of time, the lender imposes a significant higher interest rate.
How to choose for a bad credit loan?
Searching for bad credit loan lenders is not hard at all for you can easily find them online. With the multitude of lenders, sometimes it is very difficult to distinguish which lender to choose.
Hence, you need to conduct a thorough research before dealing with any lenders. You can also ask your friends and family members who have dealt with bad credit loan lenders before. Compare the different factors such as the repayment schemes, terms and condition, and interest rates so that you will come up with the best possible deal. It is just all about making a smart choice.