How to apply for an emergency loan
Once you decide on the best lender and personal loan for your emergency situation, you can generally fill out an application online. In addition to checking your credit score, your lender will typically review documents like a government-issued ID and proof of income.
With personal loans, you usually don’t have to wait long to receive funds once you’re approved. In fact, some lenders may be able to deposit money into your bank account as quickly as the same business day.
How to choose an emergency personal loan
Before you submit an application for a personal loan, do your research. Read customer reviews, compare lenders and consider the following factors.
APRs
Personal loan APRs provide a straightforward figure for comparing the costs of various loans. APRs are calculated by combining fees and interest rates over a 1-year period. In general, if you’re comparing loans with the same repayment terms, the lower the APR, the less you’ll pay to borrow.
Repayment terms
It’s important to ensure that a personal loan’s repayment terms make sense for you. If you find that the monthly payment doesn’t fit into your budget, you may consider opting for a longer repayment period to help bring that figure down. Short repayment terms, by contrast, typically have higher monthly payments but may help you pay less in interest.
Qualification requirements
Each lender has its own qualification requirements, but they’ll typically consider factors like income, employment and creditworthiness. If available, use pre-qualification to help you determine whether you’re likely to qualify for a given loan, and if so, what your terms could be. While not a guarantee of approval or terms, pre-qualification is a useful tool for evaluating your options without harming your credit score.
Penalties and fees
Personal loan penalties and fees can vary widely depending on the lender. For example, some may come with origination fees, late fees or even prepayment penalties. These fees can increase the total cost of your emergency personal loan, so it’s important to be mindful of them as you explore options.
How to use an emergency personal loan
Personal loans can offer a lifeline to help you navigate various unexpected events. If storm damage makes your home unsafe, for example, or if your car breaks down and you have no other way to get to work, an emergency personal loan may help meet your needs quickly.
Keep in mind that while personal loans may be used for most purposes, there are exceptions, which vary by lender. For instance, some personal loans prohibit using the money to pay off tuition or other educational expenses. So, it’s important to understand any restrictions in advance.1
Find the right personal loan for you
You can get an unsecured personal loan from a bank, credit union or online lender. Each loan option has its own advantages and disadvantages, so compare them before you decide.
Citi® offers flexible, fee-free personal loans that may help you overcome temporary financial hurdles and get back on track. If approved, you could get your funds as soon as the same business day if you opt to have funds deposited directly to a Citi bank account. Otherwise, personal loan funds can be deposited into a non-Citi bank account within 2 business days.2
If you think you could benefit from a Citi® Personal Loan, apply online today.
Alternatives to emergency personal loans
If you don’t want to take out an emergency personal loan, you may consider other options, including personal lines of credit, home equity loans and home equity lines of credit (HELOCs).
Personal line of credit
Personal lines of credit offer you access to a pool of money with a pre-determined limit, so you can withdraw money as needed, then repay the borrowed funds over the repayment period. A personal line of credit may be a good option if you’re facing an ongoing issue with an indeterminate cost, like a long-term home renovation. Financial institutions may provide secured personal lines of credit, which require collateral, and unsecured personal lines of credit, which may have higher interest rates but don’t require collateral.
Home equity loan or HELOC
If you own a home that has built up equity, you may have the option to take out a home equity loan or HELOC.
Home equity loans allow you to borrow against the equity in your home. They provide a lump sum that you pay back in installments over time, plus interest.
HELOCs also involve borrowing against your home’s equity. However, HELOCs allow you to withdraw funding as needed, up to a limit, during the withdrawal period instead of providing a single lump sum. After that withdrawal period ends, you’d enter the repayment period, during which you’d either repay the entire balance at once or via installments.
Emergency loans: frequently asked questions
How fast can I get a personal loan for emergencies?
Personal loans may offer quick funding for qualified applicants. Some lenders may even provide funds on the same business day that the application is approved.
How will an emergency loan impact my credit?
Personal loans may have both negative and positive effects on your credit. For example, applying for a personal loan adds a hard credit inquiry to your credit file, which can have a small, temporary negative impact on your credit score. Applying for multiple loans at once can make this impact more significant. Using pre-qualification to help you determine whether you’re likely to qualify for a given loan can help you avoid this until you’re ready to formally apply.
However, making on-time payments for your personal loan each month may help improve your credit score over time. Plus, paying off the loan may help improve your debt-to-income ratio, which may boost your credit score.
Can I get an emergency personal loan with a low income?
Personal loans may have minimum income requirements, so lenders can minimize their risk of non-payment. Using pre-qualification may help you determine whether you’re likely to qualify for a given loan.
How much can I borrow with a personal loan?
Maximum personal loan amounts vary based on the lender, and lenders may consider your creditworthiness when determining how much you’re eligible to borrow. In general, personal loans can range anywhere from a few hundred dollars up to tens of thousands of dollars. To help minimize your debt, it’s best to take out only what you need to cover your emergency. Be sure it’s an amount you can comfortably repay according to the terms of the loan.
This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
1Citi® Personal Loan proceeds cannot be used to pay for post-secondary education expenses or for business purposes. Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
2If you are approved for a personal loan with Citi, you can get your funds the same day with a Citi deposit account, or up to 2 business days for a non-Citi account when using direct deposit. Or, you can select to receive a check by mail in approximately 5 business days.
