Can you get a personal loan fast in an emergency?

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Whether it’s a home repair, medical bills, or a car repair, unexpected expenses can happen to us at any time. And, if you’re not prepared with a stocked emergency fund, your wallet could be equally surprised.

Luckily, there are other options available to help you quickly cover an emergency expense, including personal loans.

Using a personal loan to cover an emergency

Personal loans can offer quick access to extra money in an emergency.

Say you need to cover an unexpected medical expense, or your car needs a repair and you aren’t in the position to foot the bill yourself. As long as your credit is in good standing in the eyes of your lender, you could resolve your financial woes in days or weeks.

The application process for a personal loan is slightly different than it is for other types of loans. Borrowers don’t need to use their personal loan for a specific purpose, making it an ideal option for an emergency situation. And, personal loans can offer a low-interest alternative to credit cards.

Important factors that can impact your personal loan approval and disbursement time

When an emergency crops up, securing the money to cover that cost in a timely manner is of the utmost importance. However, the amount of time it takes to be approved for a new loan and receive your loan funds will vary across personal loan lenders.

Choice of personal loan lender

The type of lender you choose to go with can play a role in how long it takes to get your money. Many online lenders offer fast funding, in some cases even same-day funding, whereas traditional brick-and-mortar banks may take longer to process your application and disburse your loan — usually a few business days.

Many lenders offer online applications that you can complete in minutes, but once you’ve submitted your application, your lender may take a few days or weeks to process your application and come back to you with a decision.

Other factors that can speed up or delay your loan approval and funding include your creditworthiness, the accuracy of your application, and your loan amount.

Issues with your personal loan application

If there are any red flags on your credit report or if your application is incomplete or contains inaccurate information, your lender may circle back with further questions for you or take longer to come back to you with a final decision — especially if you’re applying for a larger loan.

They may require you to provide supporting documentation like recent pay stubs, tax returns, and other personal identifying documents.

The pros and cons of using a personal loan in an emergency

There are several pros and cons of using a personal loan to cover the cost of an emergency. While a loan can certainly provide some immediate relief in a stressful situation, it is a long-term commitment that comes with strings attached and should be considered carefully.

Once you commit to a personal loan, you’re committing to a monthly payment, a direct impact on your credit score, potential fees, and more.

Pros:

  • You’ll have quick access to extra money

  • Most personal loans offer fixed interest rates

  • You can use a personal loan to cover a wide range of expenses

The most obvious perk of a personal loan is that you’ll have quick access to the funds you need to pay for your emergency expenses. In fact, many lenders like Upstart, Avant, and LightStream can disburse your loan funds into your bank account in as little as one business day after you’re approved. What’s more — personal loans typically offer fixed interest rates, making it easier to budget for repayment.

One final major pro is that a personal loan can be used on almost anything. Approval for a personal loan is heavily based on your creditworthiness, and unlike other types of loans like a mortgage or auto loan, you don’t need to provide collateral to qualify for the loan.

Cons:

  • You’ll pay interest on the money you borrow and you’ll be responsible for a new monthly payment

  • Applying for a new loan will impact your credit score

  • Personal loans can come with extra fees that you’ll be responsible for paying

  • You won’t be covered if a future emergency arises

Personal loans do come with several drawbacks that you should consider before taking one on.

Once your loan application is submitted, you may also need to cover the cost of an origination fee. That’s the cost your lender will charge you for processing your application.

And, unlike dipping into your savings account to cover an emergency, you’ll pay interest on the amount you borrow when you go the personal loan route. When you plan ahead for emergencies by saving a little each month in an emergency fund, you won’t have to pay to borrow that money from yourself — you’ll just need to make a plan to replenish it afterward.

Applying for a new loan can also impact your credit score. Any time you apply for a new loan, your lender will conduct a hard credit check to verify the information you’ve listed in your application to determine which loan options and repayment terms you’re eligible for. That’s not all; if you struggle to make on-time payments, your credit score could see a drop.


Ultimately, an emergency personal loan is a short-term solution. It won’t cover you in the event that another emergency comes up. However, if you have a clear plan for how you’ll repay your loan, how that payment will fit into your monthly budget, and a plan for saving for future emergencies, a personal loan could be a financial lifeboat in a pinch.

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