Emergency Loans

What Are Emergency Cash Loans?

Emergency cash loans are just a type of instant loan that provides you with the money you require very quickly. Emergency loans often are applied with smaller amounts than usual. Loan amounts are usually between £50 to £250. Emergency loans are loans that are used in urgent situations where cash is required as soon as possible. Therefore, the loan term can sooner rather than instalments over a couple of months. These short term loans are designed to assist people in unexpected emergencies, such as the need for unexpected car repairs, unexpected home boiler or washing machine repair. They are similar to other types of short term loans, for instance, payday and instant cash loans, and therefore can usually be quickly tailored to your particular requirements. They are created to help people who suddenly find themselves needing money quickly, many emergency loans direct lenders in the market today can now offer these loans to people with bad credit or good credit. Lenders now look at other factors when making a decision rather than credit scores and credit reports.

Why Do Emergency Loans Have High APRs?

Emergency loans are short term loans, which are also known as Payday Loans. Therefore, as these loans are short in term and loan amounts smaller than other types of loans, they do carry a high APR with high-interest rates. The FCA (Financial Conduct Authority) has capped the interest rates to 08% per day, 24% monthly. So the maximum rates you acquire with emergency loans will be 24% in one given month. APR is an Annual Percentage Rate and represents the rates on an annual basis. This is why these numbers sometimes running into the thousands, it is easy to write these loans off as being too expensive. Whilst we completely agree that these APRs are high, they are, somewhat, misleading in that such short-term loans are not supposed to be borrowed over a long period of time instead of short terms hence the name. Emergency loans and the like are intended to be repaid quickly; often after just one month.

Most lenders charging 24%, you can generally expect to pay back around £24 for every £100 you borrow. It will be transparent to how much you must repay and when. As advised with all loans you acquire, you must be careful when taking out an emergency loan. The high APRs of such loans can become an issue if you miss repaying the money you borrow when you are supposed to. This is why is it advisable to borrow within your means and you must ensure you are comfortable financially when taking out such loans.