When you need access to funds quickly due to a sudden change to your finances, an emergency loan may be a good option. Emergency loans are simply personal loans with quick funding, so you can get the money you need within days. 

You can use the money from emergency loans for various unplanned expenses, but it’s important to know how to shop around and find the best option — even when time is of the essence.

An emergency loan is a personal loan from a lender when you need funding quickly and don’t have an option to pull from savings or want to avoid using a credit card. The money can be used for almost any type of emergency, from a flooded basement to a sky-high medical bill.

These loans are usually unsecured, which means you won’t have to put up any collateral (like a car) to secure the loan. However, you’ll want to pay attention to interest rates, as some emergency loan lenders impose higher rates.

Lenders will review your credit as part of the application and approval process, but the exact requirements, such as your credit score and income, vary by lender. Some eligibility criteria are stricter than others, but there are lenders who work with borrowers with bad credit or limited credit history. 

If approved, you can generally expect funds within a week, although it’s possible to receive funds as soon as the next business day, depending on the lender. 

You have a number of lending options when it comes to emergency loans. Each lender will typically review your credit score, verify your income, and determine how likely you are to repay the loan. Many lenders offer funding within days, which makes them an ideal option for an emergency situation. If you have good or excellent credit, you’ll find the most options and the lowest interest rates.

Here are a few places you can find emergency loans:

Online lenders are a convenient choice if you prefer to conduct the entire application process online. Many of these companies can provide funding within a business day or two once you’re approved. 

You can generally compare interest rate and term options from various lenders without affecting your credit. Once you’ve compared at least three lenders,  submit an application for the loan that’s the best fit.

It’s a good idea to consider an online lender’s reputation. Check reviews online, make sure the lender’s website is secure, and test its customer service.

Related: Learn more about getting a personal loan on Credible.com

If you have an existing relationship with a brick-and-mortar bank, you may turn to them for an emergency loan, particularly if they offer loyalty or other discounts. Most banks offer online applications and quick lending decisions too, similar to online lenders. However, banks might not offer the fastest funding times in the market.

Credit unions are another lending option for emergency loans, and they may even work with applicants with fair or bad credit. Many credit unions have brick-and-mortar locations too, which may appeal to you from a customer service standpoint.

While credit unions also offer online applications and quick funding, you must meet membership requirements. Some credit unions allow you to apply for a loan without being a member, but you typically must become a member to accept the loan. 

Looking for an emergency loan indicates that you need funds fast, but taking the time to compare emergency loan lenders can help ensure you receive the best terms for your financial situation. 

Consider the following factors when comparing lenders:

You can use an emergency loan for almost any type of situation or crisis situation, such as:

While you can use these funds for virtually anything,  check if the lender has any limitations. If you need immediate help paying for higher education, for example, you’re better off researching emergency student loans. 

You’ll generally need to follow these steps to get an emergency loan, although the process may vary by lender:

1. Check your credit score before you apply. Understanding your credit score helps you narrow down your available lending options. You can check your credit report for free weekly through the end of 2023 with AnnualCreditReport.com, and monitor your credit score via the national credit bureaus (Equifax, Experian and TransUnion), your bank or other financial institution, or third-party tools like Mint.. 
2. Determine how much you need. You only want to borrow what you need — and can realistically afford to repay. This way, you’ll avoid paying additional interest and fees. After all,the more you borrow, the more your loan costs.
3. Compare lenders. It’s a good idea to shop around with at least three lenders. Prioritize lenders that allow you to prequalify — that is, confirm eligibility and check rates via a soft credit check that won’t ding your credit. Find a lender with the most competitive interest rates, repayment terms, and customer service options for your needs.
4. Complete the application and wait for approval. After you choose a lender based on your research, fill out a formal application either online or in person. You could receive your loan funds as soon as the next day after approval. You’ll likely need to have your supporting documentation, such as pay stubs, ready when you apply.

Having bad or no credit makes it harder to get approved for emergency loans, but it’s not impossible. It would likely mean you’re subject to higher interest rates, since the lowest rates are reserved for borrowers with higher credit scores. If you do have bad or limited credit history, keep the following in mind:

Emergency loans aren’t your only option. You may want to consider other lending options, such as:

Financial emergencies cause major stress, not only on your wallet, but on your peace of mind. One way to avoid struggling with financial emergencies is to work on building up an emergency fund (similar to “rainy day fund”).

An emergency fund is money you set aside strictly for emergencies, but is easily accessible. This way you can use your emergency savings rather than turning to loans or credit cards. 

Starting a fund may feel overwhelming at first, but by focusing on the following steps, you can build up your emergency fund faster than you think:

Related: Learn more about getting a personal loan on Credible.com