There are several different types of emergency loans out there. These loans have a wide variety of uses. A loan consists of a lender giving you, the borrower, money to be used for your specific need. This agreement falls under the assumption that the lender will receive the funds back at a future date.
There are two major sub categories that loans fall under. They are secured and unsecured loans. A secured loan happens when the borrower puts up some form of asset as collateral. These assets can be property, vehicles, or some other form that is agreed upon by the lender. Secured loans are generally favored by lenders because it has a lower risk factor involved. If the borrower can not pay back the given money, the lender retains the assets that were used as collateral.
Unsecured loans are much more of a risk for lenders. Since there is a greater chance that the money may not be payed back, interest rates are much higher on unsecured loans. If a borrower does not pay back this loan, the lender has the option to take them to court. Then, the judge makes the ruling as to how the lender will receive their payment. This can be a long, drawn out process that most lenders try to avoid.
Pay day loans are probably the most common form of emergency loans. One may be behind on bills or just need extra cash to get them to their next paycheck. They are particularly easy to get compared to other types of loans. Generally, people with can get one even if they have bad credit. As long as valid proof of income is shown to the lender, it is typically hassle free. The interest can be moderately high, but that usually isn’t a large concern for borrowers. Also, the amount that can be borrowed at one time is relatively low. The majority of people that need a pay day loan just need enough money to last for a short period of time. A company I recommend for general pay day loans is http://www.personalloansforbadcredit.net/ especially if you have bad credit.
Taking a mortgage out on your home, or remortgaging, is another example of an emergency loan. Mortgage loans are used to purchase property or get a better deal on your current properties. As home and property values can be rather high, most folks don’t have the funds to purchase them outright. These loans are considered secure because the lender can take said property if payments are not made. People that receive a mortgage loan must make sure to keep up with their payments or risk the lender taking the property from them. Lenders have a strict set of criteria that must be met in order to qualify. Size of the loan, interest rate, payment schedule, and other aspects vary from lender to lender. Many lenders also choose to get mortgage insurance. This can protect them if the borrower defaults on the loan. Usually, the borrower is required to pay for the insurance policy and it is added to the amount that they regularly pay back. It can also be made an upfront lump sum.
If you are in a pinch and need money now, an emergency loan through http://www.paydayloansonline.net/ may be your best option. Problems can arise at anytime that require extra money. When all else fails, a lender could be your saving grace.