There are a lot of misconceptions about emergency loans – some people think that you have to be in debt to get one, or that they are only for people who need money for certain expenses like cars and medical costs. Since this is a guide on misconceptions, you’ve probably guessed that this is not the case. Instead, emergency loans can be used for any purpose, and you do not have to be in debt to qualify. With this in mind, here are the most common emergency loan misconceptions!
They can only be used in certain conditions
As we saw in the introduction, emergency loans can technically be used for any purpose. Whether you need the money to cover an unexpected bill or you want to use it to make a big purchase, emergency loans can provide the funds that you need. Especially with a provider like Cashify Loans, you’ll find options for medical expenses, holidays, emergencies, car repairs, weddings, debt consolidation, renovations, and more.
You have to be in debt to get one
This is probably the most common misconception about emergency loans; lots of people think that you can only get an emergency loan if you’re in debt, but that’s not true. You can get an emergency loan for any purpose, even if you’re not in debt.
Emergency loans will only make debts worse
After the global financial crisis of 2008/2009, both consumers and lenders became very wary of debt. While it’s true that some debts are bad for you, emergency loans can actually help you get through short-term difficulties. What’s more, reliable lenders go through various checks to ensure that a loan wouldn’t worsen your financial position.
The application process is slow
Have you ever heard someone say that they didn’t apply for an emergency loan because the application process is too slow? In reality, the majority of lenders have streamlined their applications so that you can get the money you need within 24 hours. That’s right – get an application in today and you could have the cash in your account by tomorrow.
The interest rates are too high
Lenders do charge interest on emergency loans, but the rates are generally much lower than those of payday lenders or credit cards. In truth, the secret is finding a lender that offers competitive rates. With a little research, you should be able to find one that fits your needs.
Lenders control where the money is spent
Some lenders may place restrictions on how you can use a loan, but most will simply require that the funds be used for their intended purpose – covering unexpected expenses. As long as you repay the loan on time, you’ll have full control over how you spend the money. While some people spend their loan funds on home purchases and renovations, others use them to cover vital expenses like rent or utility bills.
Emergency loans are not always easy to obtain
Depending on your financial situation, you may have difficulty qualifying for an emergency loan. If you have bad credit, for example, you may not be able to get a loan from a traditional lender. In this case, you may need to look for lenders who specialize in bad credit loans. These lenders are more likely to be willing to work with people in your position. Generally speaking, most people are surprised by how easy it is to qualify for an emergency loan.
Whatever the loan’s purpose, remember to only borrow what you can afford to pay back. While emergency loans can be helpful in a pinch, it’s important to remember that the healthiest financial position is one with no debts at all.