Emergency Personal Loans

Unforeseen expenses can turn an emergency into a disaster, especially if you don’t have savings to cover them. Fortunately, emergency loans offer some financial flexibility during challenging times so you can get back on your feet as quickly as possible.

What is an emergency loan

The term “emergency loan” typically refers to any short-term loan designed to cover immediate, urgent needs. While emergency loans could be secured or unsecured, unsecured emergency loans don’t require borrowers to provide any collateral, unlike a secured loan. Because of this advantage, as well as their flexibility and convenience, unsecured personal loans are a great choice for an emergency loan.

How emergency loans work

Emergency loans provide one lump sum loan to qualifying applicants, who pay the loan back over time in monthly installments with interest. Lenders consider your creditworthiness and income to determine whether you qualify for an emergency loan and what your interest rate should be.

Once your application has been approved, the funds will be deposited in your account, and/or direct deposit, and you’ll be free to use a personal loan in an emergency to meet some qualifying expenses you might have.

How to apply for an emergency loan

Once you decide on the best lender and emergency loan for your situation, you can fill out an application online. If you’re uncomfortable with online applications, you can apply in person, but that might take more time. In addition to a hard credit inquiry, your lender may also review identifying documents like a state ID and proof of income.

You won’t have to wait long to receive your approval decision. Some lenders offer a response on your application in as little as 60 seconds.

How to choose an emergency loan

Not all emergency loans are created equal. Before you submit an application, make sure you do your research. Read customer reviews, compare lenders, and consider the following factors before you make your decision.


APRs, or annual percentage rates, provide a straightforward figure for comparing the costs of various loans. APRs are calculated by combining fees and interest rates over a one-year period. A loan with a lower APR will cost you less overtime, but you may still end up paying more interest on a longer repayment period versus a shorter repayment period.

Repayment terms

No matter your situation, never choose a plan with monthly payments that you know you will struggle to afford so you can avoid accumulating debt. Because of your loan’s interest rate, choosing a longer repayment term means paying more overall. Short repayment terms have higher monthly payments but save you money on interest.

Qualification requirements

Pre-qualification can help you determine whether your credit qualifies you for a loan. But, pay attention to other requirements like income, employment, or the requirement to have a relationship with a financial institution to ensure you find the best possible fit.

Penalties and fees

Emergency loans can come with a variety of fees and penalties, including disbursement fees, fees for late payments, application fees, and even prepayment penalties. Fees increase the total cost of your emergency loan, so you should be mindful of the fees associated with different loans as you explore different options in the market.

How to use an emergency loan

Emergency loans offer a lifeline to help you face a wide range of 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 or school, an emergency loan can meet your needs quickly.

When an injury or a sudden illness sends you to the emergency room or even urgent care, you could find yourself dealing with huge unexpected medical bills. An emergency loan can help you pay off your medical bills right away and access the care you need. If your health emergency forces you to take any unpaid time from work, and you fall behind on expenses like rent or utilities, an emergency loan can help. It’s crucial, however, to budget so you can cover future bills as well as emergency loan repayments.

Some personal emergency loans include stipulations for how you can apply for funds. For instance, some personal loans prohibit using the money to pay off tuition or other educational expenses.  So, it’s important to make sure you understand a loan’s terms in advance.

Alternatives to emergency loans

You can get an unsecured personal loan from a bank, credit union, or online lender. Each of these options has its own advantages and disadvantages, so it’s smart to compare them before you decide.

Personal line of credit 

If you’re facing an ongoing issue with an indeterminate cost, like a long-term home renovation or complex medical problem, a personal line of credit could be a good option. Personal lines of credit offer you repeated access to a pool of money with a predetermined limit, so you can withdraw money as you need it. Financial Institutions provide both 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 your home, you can take out a home equity loan or home equity line of credit against the value of your home’s equity. Borrowers receive a lump sum that they pay back in installments over time. Home equity lines of credit (HELOC) are similar to home equity loans in that you can take them out against your home’s equity. However, like personal lines of credit, HELOCs allow you to withdraw funding as you need it during the withdrawal period, instead of as one lump sum.

Emergency Loans: Frequently Asked Questions

How fast can I get an emergency loan?

Emergency loans are designed with speed in mind. Lenders evaluate applications quickly, usually responding within a day. After your emergency loan application is approved, you can receive a deposit in as little as a few hours or as long as a few weeks.

How will an emergency loan impact my credit?

Emergency loans have both negative and positive effects on your credit. The application process includes a hard credit inquiry, which takes off a few points from your FICO credit score. It’s especially important to keep this in mind if you’re considering applying for several loans. Emergency loans also, of course, increase your overall debt, which can hurt your creditworthiness. However, if you make complete payments on your emergency loan on time each month, it has the potential to boost your credit score. Furthermore, by improving your payment history, and your debt-to-income ratio, your monthly payment will lower as you pay back more of the loan.

Can I get an emergency loan with a low income?

Emergency loans typically include income requirements so lenders can minimize their risk of non-payment. Good credit can increase your likelihood of loan approval even if your income is low. However, if you’re concerned about both low income and bad credit, you still have options. Seeking out a co-signer can improve your likelihood of approval and help you secure a lower interest rate.

How much can I borrow with an emergency loan?

It’s important to consider both the long-term costs of your emergency and your budget when you take out an emergency loan. Maximum loan amounts vary based on the lender. In order to minimize your debt, you should try to take out only what you need to cover your emergency.

Find the right emergency loan for you 

Emergency loans can help you overcome temporary financial hurdles so you can get back on track quickly. Citi offers personal loans to both existing Citi customers and new Citi customers that meet specific eligibility criteria, including an established credit and income history along with additional factors determined by Citi. If you think you could benefit from a Citi Personal Loan, apply online today.

Disclosure: 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.

Additional Resources

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  • Learn how FICO® Scores are determined, why they matter and more.

  • Review financial terms & definitions to help you better understand credit & finances.