There are many ways to get an emergency loan but unsecured personal loans make the most sense in an emergency, as they offer the best risk-to-cost ratio. Let us take a look at where you can get such a loan and what requirements the borrower must meet.

Required Qualifications to get an Emergency Loan

Good Credit Score

To qualify for an unsecured personal loan and pass the credit check, the first thing you need is a good credit score. No matter if it’s an emergency or not. With Best Egg, the required credit score is 640, but there are also lenders that demand a higher score.

Acceptable Credit History

There are also personal loans for borrowers with bad credit. In those cases, however, the interest rates are much higher and the loan amount lower. In addition, most lenders want to see your credit history within your loan application. The timeframe the lender wants to investigate varies. Some want to see the last two to three years and others up to five years.

Minimum Salary

In addition, some lenders ask for information about your annual salary. If that is the case, you must meet the minimum required to qualify for a loan. According to Loanry, such a minimum income varies very strongly and can be $15,000 or higher depending on the loan amount you consider.

Satisfying Debt-to-Income Ratio (DTI)

From your debts, which result from your credit history and credit score, together with your income the lenders calculate your debt-to-income ratio (DTI). This is presented as a percentage and indicates the portion of your gross monthly income that is used to pay off existing debts. The Forbes Adviser describes a DTI of under 36% as ideal. However, if you can qualify in another way, a DTI of up to 50% is also sufficient.

You can check your DTI with the Best Egg Debt-to-Income Ratio Calculator.

If none of the requirements are met, there is also the possibility for borrowers with bad credit to add a cosigner with good credit and appropriate qualifications.

Where Can You Get an Emergency Loan?

Many banks and credit unions offer unsecured emergency personal loans. And while it is nice to sign the papers over coffee at your local bank, online lenders often offer many advantages over their analog predecessors. The Internet offers an almost endless supply of personal loans.

Whether you are looking for a loan with the lowest possible monthly payments or despite bad credit, there is the perfect personal loan for you. To get an overview of the wide range of loans, there are various comparison portals.

What Is the Process of Getting an Emergency Loan?

Once you have chosen a lender and requested the emergency loan, the qualification process begins.

To prove that you meet all the required qualifications, you will need to submit official identification documents as well as bank statements or income tax statements. Which documents are required depends on the lender, but usually, you will need documents proving your identity, place of residence, and financial situation. Since all these documents are submitted and processed digitally by online lenders, the application process is usually very fast.

Afterward, you will receive a confirmation of your qualification and a contract to be signed. Once you have signed the contract digitally, often it takes a few hours only until you receive the loan amount in a lump sum in your account. After a set period of time, you start repaying in the form of monthly payments.

Other Ways to Get an Emergency Loan

If you do not qualify for an emergency personal loan, do not hang your head. There are some other options, but keep in mind that some of them might be very costly.

Payday Loan

Emergency payday loans come with high-interest rates and are offered both in-store in specialized banks or online. If you go to a bank, you will often get the loan amount immediately in cash. But with an online lender, you can expect that the money will be transferred to your account on the same day as well.

Title Loan

Title loans are usually offered by the same lenders as payday loans. Here, too, you can pick up the loan fund at local locations or have it transferred online. For this loan, however, you must have not only proof of income but also all relevant vehicle documents.

HELOC

Using a HELOC or other kind of credit line as an emergency fund, you can withdraw large amounts of money whenever you need it. It also allows you to invest your saved emergency savings profitably.

Credit Card Advances

The easiest, but also one of the most expensive ways to get a loan quickly is to use your credit card. If the account is empty, depending on the bank and credit score, you can still pay with the credit card and thus take out a loan over the overdrawn amount.