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Emergency Loans in Canada

Your life would probably be a lot easier if you had a clear idea of every expense that’s coming your way. But the unfortunate reality is that there’s no way of knowing exactly what’s coming down the pipeline, so it’s important to prepare for the unexpected. An important question to ask yourself is if you’re suddenly faced with an emergency expense, do you have the means to deal with it?

If money is tight and you haven’t planned for the unexpected, you might find it challenging to come up with the money you need to take care of emergency expenses. If this is the situation you find yourself in, there may be emergency loans in Canada that could help you out of a short-term rut. These loans are meant to provide a short-term financial solution when your savings are low, and you need to take care of an emergency expense right away. While they can be useful, you should never take on any amount of debt without serious consideration and you should ensure you have an understanding of the emergency loans you’re applying for.

Something to keep in mind is that when you’re on the hunt for small emergency loans, there could be multiple options available to you, depending on their requirements and your qualifications. So, to give you a starting point for this process, we’ll take a look at a few different types of emergency loans in Canada, go over why you might want to consider online loans, and more.

What are Emergency Loans?

You can probably guess what the function of an emergency loan is based on their name, but to put it in simple terms, it’s a type of personal loan that’s meant to be used for short-term financial emergencies. This doesn’t mean that you should apply for a loan every time you’re looking to go on vacation, taking a trip to the mall, or even for recurring bills that should already be accounted for in your budget. Their purpose is just for essential and unexpected expenses.

If you feel like your situation warrants an emergency loan, you may go through the application process online or in person. But why would you decide to apply for an emergency loan online?

What are Emergency Loans Online?

There are a lot of different kinds of personal online loans that you can apply for, but when we’re talking about emergency loans online, we’re generally referring to short-term personal loans that are available through an online application process.

As described above, an emergency loan online should be used for financial emergencies.

What are the Potential Benefits of Emergency Loans Online?

Now that you have a better understanding of what online emergency loans are, we should try to answer the question of why you’d want to go through the application process online in the first place.

The first thing you may want to consider is the speed of the application process. If you have an emergency expense you need to take care of, it’s usually in your best interest to deal with it as fast as possible. Otherwise, it may end up being a pricier problem to take on than it was initially. When you apply for an emergency loan online, you may be able to fill out the application in minutes. With some lenders, if you’re approved, you may even be able to get your money deposited into your bank account in a single business day.

It’s also important to point out how convenient online loans in Canada can be. You can apply from wherever you can access the internet, and you can even start your application 24/7 in a lot of cases.

Different Kinds of Emergency Loans in Canada

There are different types of loans that fall under the umbrella of online loans. And if you need a financial boost in an emergency, you’re going to want to have a clear idea of what your potential options are to try to make the right choice for your situation. With that in mind, here are some of the types of emergency loans that may be available to you.


1. Installment Loans

If you’re approved for an installment loan, you’ll be given a lump sum of money. From there, you will be required to meet all your loan payments until you’ve repaid what you’ve borrowed, plus interest and/or fees. Your entire repayment schedule will be laid out for you ahead of time. But how much will you need to repay, and how long is this going to take? That’s going to depend on things like the lender, the kind of installment loan, and certain other factors.


2. Title Loans

Title loans are a kind of secured loan, which means you’ll need to put up collateral in order to qualify. If you fail to pay back your loan, you may end up losing whatever valuable asset you’ve put up as collateral. This helps lenders recoup the value even when customers aren’t able to repay their loan.

Auto title loans are a common example of this kind of loan. With this type of loan, your collateral will be your car, so if you aren’t able to pay back what you owe, a lender may leverage your vehicle.


3. Lines of Credit

A personal line of credit is similar to a credit card in that you’ll be able to access a credit limit, if approved. It’s a fairly flexible option in that you can draw funds on a continuous basis from your available credit. You’ll need to pay back what you’ve borrowed with any applicable interest and/or fees, but you’ll only need to pay these charges on what you’ve drawn, not the total amount of your line of credit limit. Keep in mind that there may be other fees associated with the line of credit.

Where do I Apply for Emergency Loans?

If you want to apply for an emergency loan online or in person, you may have a few options you can go with. If you want to apply for one at a brick and mortar location, you can go to a bank, credit union, or an independent lender. If you want to apply online, you can do a quick search to see what options are available in your province or territory. For example, there’s no sense in typing in a search for “emergency loans Alberta” if you live in Ontario. Make sure to specify your search to wherever you live.

Comparing Emergency Loans

To piggyback off the previous section, it’s important that you have a close look at what types of loans are available from different lenders before you decide which emergency loan to apply for. Fortunately, this shouldn’t be too complicated, especially with emergency loans online. All you need to do is search for online loans offered in your province or territory, open up your potential options on different tabs, compare the different products in front of you, and decide which option is best suited to your needs and financial situation.

How to Get an Emergency Loan

The qualifications for loans available from different lenders may vary. For example, some lenders may require a higher credit score than others. But this doesn’t mean that there isn’t going to be any overlap from one loan (or lender) to the next. Generally speaking, factors like your income, employment, credit score, and more will be considered in most cases. Before you apply for an emergency loan, it’s always a good idea to get a sense of what factors are going to be looked at in order to determine your creditworthiness. Some lenders may have this information clearly visible on their website.

Can I Get Emergency Loans for Bad Credit?

Sometimes, one of the biggest roadblocks to qualifying for emergency loans with rates that suit your financial situation can be your credit score. If you don’t have a strong history of repaying your bills on time, or you’ve made some mistakes in the past when it comes to handling credit, things can get a little trickier for you moving forward. After all, your credit score can be a key indicator for lenders when it comes to determining your creditworthiness.

Having said that, poor credit doesn’t necessarily mean that you’ll be completely out of options as there are emergency loans for bad credit. Instead of focusing so much on credit history, lenders that offer these types of loans may place more of an emphasis on some of the other qualifications that we touched on earlier, like your income and employment. While these options can be worth exploring, it’s important to keep in mind that these types of loans generally have higher rates.

How Much does an Emergency Loan Cost?

There’s no single figure that we can site to answer this question. The truth is, there are going to be a bunch of factors in play that go into determining the cost of a loan. This can include things like:

  • the lender offering the loan;
  • the type of loan; and
  • your credit score.

If you’re considering an emergency loan, you should make sure you know what the cost is going to be before you apply.

Considering Emergency Loans in Canada

As much as we’d like to avoid them, emergency situations are an unavoidable part of life. And unfortunately, the cost of dealing with them often doesn’t come cheap. Your first move should be to set up an emergency fund so that you have some cash on reserve for these kinds of situations. But if you don’t have one and need a little financial help, an emergency loan may be a short-term solution. Make sure to put the necessary time and effort into finding something that works for you, and only apply for a loan if you can afford to repay it.