Best emergency loans of May 2024

When you need quick funds, an emergency loan can help cover the cost. But between personal loans, title loans, payday loans, credit card advances, and cash advance apps, there are several types to consider.

Personal loans tend to be the best type of emergency loan, as they have annual percentage rates (APRs) that are much lower than options such as payday or title loans, and can often beat your credit card’s regular rate as well.

Compare the best emergency loan rates of May 2024

Best emergency loans

Most lenders below can fund your loan as soon as the same day you apply, or the next business day once your application is approved. Look for ones that offer the loan terms you need and are likely to approve applicants with your credit score.

SoFi: Best overall

LightStream: Best home improvement loans and low rates

Reach Financial: Best for fast funding and fair credit

Zable: Best for short-term loans and same day funding

Upgrade: Best for fair credit

Discover: Best for no origination fees (and low rates)

Universal Credit: Best debt consolidation loans for bad credit

Avant: Best for all credit types

Methodology

We evaluated the best personal loan lenders for emergency loans based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Our team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

How to compare emergency loans

While shopping for an emergency loan, pay special attention to these factors:

• Annual percentage rate: APR is a better measurement of a loan’s borrowing costs than the interest rate alone, since it includes interest and upfront fees the lender charges you. An origination fee is typically the most common, and is charged when you receive the loan. You can expect an origination fee of anywhere from 0% to 12%, depending on the lender.
• Loan amounts: Most personal loan lenders offer amounts as low as $600 and as high as $100,000. Payday lenders typically offer loans of $500 or less, but they come with exorbitant APRs of up to 400%. Loan amounts can vary for title loans, credit card advances, and cash advance apps.
• Repayment terms: For personal loans, the shorter your repayment term, the higher your monthly payment and the less you’ll pay in interest. On the other hand, a longer repayment term means a lower monthly payment, but you’ll pay more interest over the life of the loan. Most repayment terms range from 1 to 7 years.
• Funding speed: You can find lenders who fund as soon as the same or next business day, depending on when your loan is approved.
• Lender reputation: Steer clear of any lender showing signs of predatory lending practices including exorbitant interest rates, hidden fees such as a high prepayment penalty, and not requiring a credit check. Reading customer reviews on websites like Trustpilot can help you judge whether a lender is trustworthy.

Check out: Best fast personal loans

How do emergency loans work?

An emergency loan typically refers to a loan that grants you access to funds as soon as the same or next business day. Emergency loans are usually unsecured loans, meaning no collateral needed to secure them. You can use these loans for most purposes, including medical expenses, car repairs, or a large purchase.

However, not all emergency loans are created equal. Personal loans have larger loan amounts, but can be difficult to qualify for if your credit isn’t ideal. Payday loans, meanwhile, are easier to qualify for and come with smaller loan amounts — usually $500 or less — but typically need to be repaid within two weeks and often come with exorbitant APRs of around 400%.

Here are the several types of emergency loans to consider:

• Personal loans: These emergency loans are fixed-rate monthly installment loans that are generally unsecured, meaning you don’t have to pledge an asset, such as an investment or bank account, to qualify. But some lenders may place comparatively strict requirements on income or credit score, and it can be more difficult to qualify if your FICO score is under 670. However, there are lenders who specialize in bad-credit loans.
• Credit card advances: A credit card advance allows you to withdraw cash against your credit card’s available limit. However, interest typically begins to accrue immediately. The fee is also generally higher than your card’s standard APR. Common fees include annual fees and cash advance fees.
• Payday loans: These are short-term loans with expensive rates and fees — APRs can be as high as 400%. Fees generally range from $10 to $30 for every $100 you borrow. You can generally borrow up to $500 for up to two weeks and there’s typically no credit check. However, this option should only be considered as a last resort, and the Consumer Financial Protection Bureau warns that they can trap borrowers in a costly cycle of debt.
• Title loans: You’re required to pledge the title of your vehicle as collateral for these loans. If you don’t repay the loan as promised, a lender can seize your vehicle. You should avoid title loans, if possible, as they come with high costs such as 25% monthly finance fees and APRs as high as 300%.
• Cash advance apps: While cash advance apps can be convenient, they can also be an expensive option for borrowing. These apps allow you to borrow a small amount from your next paycheck, but they also often charge subscription fees and optional tips. Cash advance apps also have other fees depending on the app, such as a fast funding fee.

Qualifications for emergency loans

When you apply for a personal loan for emergencies, lenders usually consider the following factors:

• Credit score: Your credit score signals to a lender how risky it may be to lend you money. The higher your score, the better your approval odds and chances of securing a competitive rate. Most lenders prefer a score of 670 or above.
• Income: Most lenders require you to prove you can repay the loan by sharing financial information, such as recent pay stubs and bank statements. Specific income requirements vary by lender, but can be as low as $1,000 and as high as $100,000 annually.
• Debt-to-income ratio (DTI): Your DTI measures your monthly debt load against your gross monthly income. Having a high DTI can hurt your chances of qualifying, as it may indicate to a lender that you may not be able to handle additional debt. Lenders typically prefer a DTI of 35% or less.

How to get an emergency loan

The application process differs depending on the lender, but here are the typical steps to take:

1. Check your credit: Check your credit score to assess whether you meet a lender's minimum credit score requirements. You can access your credit score for free using credit scoring websites or through a credit card issuer that offers credit scores. You can also request a weekly copy of your credit report from each of the major credit bureau at AnnualCreditReport.com.
2. Compare lenders: To get the best deal, compare rates, loan amounts, terms, and repayment terms across multiple lenders. Some lenders allow you to prequalify to get estimated terms without harming your credit. Prequalification acts as a soft pull on your credit score, which does not affect your credit. It should be noted that prequalification is not an offer of credit, and your final rate could be higher.
3. Apply for a loan: After you find the option that’s best for you, submit a formal loan application. Many lenders will ask you to provide several pieces of information, such as your income (with proof via recent bank statements and pay stubs) and Social Security number. When you officially apply for a loan, the lender will perform a hard credit pull, which can temporarily lower your credit score.
4. Sign the loan agreement and begin payments: If approved, the lender will send you a loan agreement. Review this document carefully to ensure you agree with the loan terms before signing. Once you receive your funds, make on-time payments to avoid late fees and damage to your credit.

How to improve your chances of approval

If you’re concerned about not getting approved for a personal loan, taking these steps can help:

• Lower your DTI: You can lower your DTI by paying off small debts or increasing your income with a new job or side hustle.
• Get a secured loan: Although most personal loans are unsecured, some lenders offer personal loans secured by collateral such as your home or car. This makes it less risky for the lender, because if you default on your loan, the lender can seize your asset. Attaching collateral to a personal loan may help you qualify even with bad credit.
• Add a cosigner: A cosigner is someone who agrees to pay a loan if you’re unable to. When asking someone to cosign, make sure they understand that not paying the loan could affect their credit, as well as yours.

Alternatives to emergency loans

Taking out an emergency loan isn’t the only way to cover emergencies. If you think it’s not the right move for you, consider these alternative options:

• Personal line of credit: Similar to a credit card, you have access to a revolving line of credit and can borrow as much as you need up to your credit limit. Interest accrues once you draw your funds, and you’ll have to make monthly payments on what you owe. You can typically access your line of credit as soon as one business day after approval. However, keep in mind that personal lines of credit are usually unsecured, so they can come with higher APRs, and you may not qualify if you have a less than ideal credit score. You can find them at banks or credit unions.
• Payday alternative loan: As the name implies, these are affordable alternatives to conventional payday loans, but are only available to members of federal credit unions. These short-term loans offer loan amounts up to $1,000 with repayment terms up to six months. However, expect application fees (which are capped at $20) and rates as high as 28%.
• Nonprofits: Depending on your income, you may qualify for financial assistance with a nonprofit organization, such as a church or community organization. You can also call 211 for assistance with your finances.
• 0% APR credit card: You may qualify for a credit card with a 0% APR promotional period if you have good-to-excellent credit. As long as you pay off your balance in full before the promotional period comes to an end, you can avoid paying interest. But if you don't, you'll pay interest on any remaining balance at the card's standard rate.
• Medical repayment plans: If you have a medical emergency, ask your provider if they offer medical repayment plans with no or low interest.
• Borrow from a family member: A family member or friend may let you borrow money for a lower rate than a traditional lender. If you find someone who agrees to this, put the terms of the agreement in writing and repay them as promised to avoid a potential rift in your relationship.

Emergency loans FAQ

Where can I get an emergency loan?

You can get an emergency loan from various financial institutions, including banks, credit unions, and online lenders. You can also take out a credit card cash advance, or use a cash advance app to get funds before your next paycheck. Payday loans and title loans are also possible options, but only consider them as a last resort, as they often come with fees and rates as high as 400%.

Learn more: Where can I get a personal loan?

Should I build an emergency fund?

Yes, creating an emergency fund is one of the best ways to avoid taking out an emergency loan. It’s generally recommended to have at least six months of savings built up in an emergency fund. Creating a budget is one of the first steps toward assessing how much you can put toward your emergency fund. Then, put that money in your savings account each paycheck.

What can I use an emergency loan for?

You can use an emergency loan for just about any purpose, including car repairs, home repairs, medical expenses, emergency pet care, and funerals. Note that some lenders may not allow you to use funds for certain purposes, like business emergencies.

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