5 Considerations When Securing an Emergency Loan in Canada

emergency loan

Maybe you’ve received a large medical bill in the mail, or perhaps a loved one has unexpectedly passed away. You may be searching for answers, and you’ve found what seems like the best solution to your problem: securing an emergency personal loan. You may be looking for lenders who offer fast loans for bad credit, or a lender offering instant loan approval. While this type of emergency loan can be a lifesaver in certain financial situations, you need to remember several important details when applying for this type of assistance as well as the period during which you have to pay it back. Below are five questions you may have when you are applying for a quick personal loan in an emergency situation.

1. What is an Emergency Loan? 

Emergency loans sound almost too good to be true. Is there really a way to get money when you need it, pay it back, and not deal with high interest rates and lots of extra strings attached? Yes and no. But it is true that these loans are relatively easy to obtain. You likely will not have to offer collateral, as they are generally considered “unsecured”. Most personal loans are doled out in relatively small amounts that usually total less than $1,000. Emergency loans are a form of personal loans, and can vary in lending amount, interest rates, and repayment time. These factors depend on which lender you approach for a loan. You can apply through a bank or a credit union, both in person or online. You can also choose a purely online lender.

2. What Situations Can I Use This Type of Loan For? 

Though it may seem like an emergency that you cannot pay for takeout meals or online shopping orders, these situations (unfortunately) do not qualify for loan approval. Emergency loans are most often approved in the following situations:

  • Unexpected medical expenses
  • Rent or mortgage payments
  • Car or home repairs
  • Expenses related to funerals and burial services for a loved one 

3. Do I Need to Have Good Credit?  

We’ve all been in financial situations where we either don’t have enough money to purchase what we want, we don’t have good enough credit to qualify for a service, or we are worried about our ability to meet a payment deadline. Good credit often isn’t a necessity for emergency loans; after all, these loans are for emergency situations and they are usually given in small amounts. Some emergency personal loans do require having a good credit score to apply, though. Check with your lender to be sure.

4. Should I Visit my Bank to Get an Emergency Loan?  

Banks usually do offer emergency loans and lines of credit; however, these institutions are not your only option. They may not even be your best or quickest option. Many banks prefer you to apply in person, which could be impossible depending on your situation. It may be difficult to take a trip to the bank in the midst of funeral preparations, for example.

Online lenders are a great option for those on a tighter timeline who cannot wait for a lengthy processing period. Credit unions, like banks, also offer loans. Many credit unions and banks offer online application options.

5. What Should I Keep in Mind After Securing my Loan?

You should make sure to note your lender’s name, your account number, and the amount of your loan. These details may seem memorable at the moment, but the stress from your emergency may cause you not to remember as well as you think. Keep slips from the bank, jot down notes on your phone, and if using an online lender, make sure to save your login information. In addition, you should talk with your lender about your interest rate, payback date, and the consequences of not paying back your loan on time. Try not to worry. Emergency loan lenders typically process your loan within 15 minutes and supply your funds within a few hours. Securing an emergency loan — as well as the situation necessitating the loan — can make for a stressful few days, but do not forget to make note of the small details in these moments of panic or grief. Remember to take as much time as you have in your situation, to carefully evaluate lenders and be on the lookout for scams and fraudulent financial schemes.

Contact LoanConnect today to discuss your situation and discover easy loans in Canada for which you may qualify.


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