5 Best Emergency Bad Credit Loans in 2021

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No matter how much you plan for your financial expenses, unforeseen circumstances can always arise – whether it’s a medical emergency, your car breaking down, a funeral or any other unforeseen event that requires urgent money, you don’t want to be without recourse when painted in a financial corner.

This is where emergency loans come in. For people with good credit, getting an emergency loan at a reasonable interest is relatively simple. If you have bad credit, however, things can seem much more complicated. Fortunately, some companies offer emergency loans to those with bad credit.

5 Best Emergency Bad Credit Loans in 2021

These companies all offer low interest rates, user-friendly policies, and almost immediate money transfers.

1. Before

Avant is an online lending platform in partnership with Webbank. More than 1.5 million people have benefited from Avant since its inception in 2012. Avant offers emergency loans to all borrowers, even those with a credit score as low as 600.

You can get a loan from $2,000 to $35,000 the next business day after approval. Avant annual percentages start at 9.95% and go up to 35.99%. The term of the loan varies from 24 to 60 months.

Benefits

  • No fees incurred when paying an existing loan
  • Instant loan approval
  • Prequalification does not affect the borrower’s credit score

The inconvenients

  • Higher interest rates
  • Several fees, including administrative fees, which go up to 4.75%

2. Rocket Loans

You’ve probably heard of Quicken Loans; Rocket Loans is their sister company. Rocket Loans provides loans to fair credit borrowers ranging from $2,000 to $45,000, which is higher than most other lenders.

Their APR ranges from a low of 5.97% to a high of 29.99%. For each loan you take out, the repayment period varies between 36 and 60 months. It all depends on your credit history and income.

Benefits

  • Instant funding
  • Discount if automatic payment is configured
  • Offers pre-qualification that does not affect your credit score

The inconvenients

  • Limited refund terms
  • Assembly fee invoice

3. PenFed Credit Union

PenFed Credit Union is one of the most established credit unions in the United States. It offers a wide variety of financial products, including personal loans. Although it is aimed specifically at the military, everyone is free to apply whenever they wish.

Whether you’re looking for urgent cash to deal with medical emergencies, debt consolidation, or home renovations, PenFed Credit Union has you covered. You can borrow up to $50,000 and their APR ranges from 5.99% to $17.99.

With PenFed, your loan repayment term can be up to 60 months, but you cannot get an extension. Once you’ve been approved for a loan, you can expect to receive your money within one to two business days.

Benefits

  • Borrow as little as $600
  • Allow co-signers
  • Attractive interest rate

The inconvenients

  • No prequalification option
  • Only available to PenFed Credit Union members

4. Best egg

Established in 2014, Best Egg offers quick personal loans that borrowers can use in the event of an unexpected emergency. Through Best Egg, you may be able to borrow between $2,000 and $50,000 and receive the proceeds directly into your account within one to three business days once approved.

APRs range from 5.99% to 35.99%. The loan terms for Best Egg are between 36 and 60 months.

Benefits

  • Competitive interest rates
  • No prepayment penalty
  • Borrowers can check rates without affecting their credit score

The inconvenients

  • Assembly costs
  • No discount for automatic payment
  • Limited refund terms

5. Lending Club

LendingClub is one of the leading lenders in the United States, connecting borrowers with investors since 2007. You can get between $1,000 and $40,000 to use in times of financial emergency. You will receive your money often within two days of approval, depending on the factors.

The APR for LendingClub personal loans ranges from 7.04% to 35.89%, which includes a 5% origination fee. Your repayment term can vary from 36 to 60 months.

Benefits

  • Joint loans available
  • Borrowers can get loans starting at just $1,000
  • No prepayment fees

The inconvenients

  • Assembly costs
  • Limited refund terms

How to choose an emergency loan

Emergency loans are helpful. With so many lenders available, it can be difficult to find a reliable lender. These are some of the things you should consider before settling on a loan company.

Cost

Nobody can guarantee you a free loan. It’s okay to borrow money to fund your emergencies, but it won’t make sense if the loan you take out has an unreasonably high interest rate.

Credit score and financial history

You cannot expect to walk into a money lending institution and walk away with the money if you have bad credit. If you have bad credit, the best thing you can do is find ways to improve your credit score, so you have easier access to loans when you really need them. If you have poor credit and really need a loan, consider finding a co-signer.

Debt to income ratio

Regardless of how much you want to borrow, it’s important to maintain a low debt-to-income ratio. Your debt ratio is the amount of money you owe compared to the amount you earn. A low debt-to-income ratio means you borrow much less than you earn, while a high debt-to-income ratio means the opposite.

Carry

Emergencies are inevitable. You could end up with bad credit and need a loan. If so, be sure to compare loan offers from multiple lenders and opt for an option that meets your needs. Once you’re on the right track, get into the habit of investing in an emergency fund and look for ways to improve your credit so you have more options in the future.

About the Author

Lydia Kibet has been writing professionally since 2017. Her passion for helping brands with all aspects of content marketing shines through in the expert industry coverage she provides – personal finance, investing, and healthcare. His work has been featured in The Motley Fool, Investor Junkie, Green Market Report and Medical News Today. When she’s not writing, she’s reading, playing guitar or catching up with nature. Follow her on Twitter.

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