What is an emergency loan?
Emergency loans are typically short-term loans designed to help borrowers cover expenses in an urgent situation. Borrowers can use emergency loans for unexpected expenses like medical bills, car repairs, or fire and flood damage.
Can you get an emergency loan if you have bad credit?
It is possible to get an emergency loan if you have bad credit, but eligibility depends on the lender. Some lenders require good credit, while others provide emergency money loans for bad credit.
When searching for emergency loans bad credit in Australia, it’s best to check your eligibility before applying.
Who offers emergency loans?
A huge number of online lenders offer emergency loans in Australia. Each lender is different and may offer varying loan options, so it’s best to compare before you apply.
How do you take out an emergency loan?
Most, though not all, emergency loan lenders operate online and provide a relatively straightforward online application process. After you complete and submit an online form, the lender will review it and either approve or deny your loan request.
How long does it take to get an emergency loan?
The application process for emergency loans is typically quick, but the time it takes to receive your money varies from lender to lender. Some lenders provide emergency cash loans in one hour, while others provide your funds within a couple of days.
What are the pros and cons of emergency loans?
Emergency loans help you cover urgent costs, which can be beneficial in avoiding consequences like repossession or credit damage. Emergency loans are also relatively simple to get and allow you to access funds quickly.
However, borrowing money always comes with risks. Like other personal loan options, there are consequences if you default on your emergency loan. You may rack up additional debt that can be difficult to overcome. Emergency loans also have several associated costs and fees, from high interest rates to high late payments.
What are the alternatives to emergency loans?
Centrelink advances, low-interest credit cards, and negotiating with your providers are all alternatives to emergency loans. Depending on the costs you need to cover, you may be able to ask for a payment plan from your provider or supplier.
Those receiving Centrelink benefits might be searching the web for an emergency loan from Centrelink, but they actually may be eligible for advance payments that would allow them to avoid loans of any kind.
If you’re struggling with existing debt, a debt or financial counsellor may also be able to help.
CASE STUDY: Mark cops the consequences
Mark had a medical emergency, and his medical bills have been piling up. He decides to take out an emergency loan to cover costs. Mark wasn’t confident about making his repayments, but he needed to pay the hospital, so secured the loan anyway. Mark pays the first few loan payments, but soon cannot make the payments. The consequences become apparent as his credit score drops and his interest adds up. Mark has unfortunately taken out a loan he can’t pay, and is paying the price.