If you’re unable to get a loan from your bank or financial institution, you may be able to get an emergency loan by applying for one through the lender. The lender will review your application and decide which type of loan will be best for you. There are three types of Emergency loans for bad credit direct lenders: short-term, long-term, and revolving.
Short-term emergency loans are typically granted for one year, though the average term is around six months. You may find that it’s preferable to ask for a long-term loan instead of a short-term one, which can be costly and get you into trouble with your credit. Suppose you do decide to go with a short-term loan. The lender will usually require you to have some collateral or up to 20 percent of your checking account’s balance available as collateral if you don’t have enough money on hand. This is because the lender wants to make sure that you can make all your payments before extending a new loan. If you don’t meet your payment obligations within two weeks after receiving the check, they’ll return it and stop lending money until they see significant improvement in your financial condition.
Revolving loans differ from other types of emergency loans. They’re not tied to one specific amount of money; instead, the amount is connected directly to how much money you earn and how much debt you owe at any given time. The interest rate on these types of loans varies by lender and can change without notice. For a revolving loan to be approved, your income must be adequate to make payments, and you must be able to pay back what you borrow within three months or pay a higher interest rate for the privilege.