Personal Emergency Loans

Personal Emergency Loans

Written by Caitlin Wood
Last Updated August 26, 2022

Facing an unexpected personal emergency all alone with no help, financial or otherwise can be extremely stressful and difficult to handle. But unfortunately, sometimes life happens which means you need to be prepared with a backup plan. We always suggest having an emergency fund where you save a small portion of your paycheque each month. This is obviously easier said than done, so if you’re going through a rough financial patch or your emergency fund doesn’t quite cover the cost of your emergency then you need to consider your options. A small personal emergency loan with a lender like Fairstone could be exactly what you need to cover your unexpected financial costs and keep you from plummeting into high-interest debt.

Can a Personal Emergency Loan Help You?

Personal emergency loans are for everyone in any kind of situation, whether you’ve had an unfortunate medical emergency, your car broke down or the plumbing in your house has sprung a leak. The great thing about emergency loans is that once you’re approved you get to decide what to do with the money; you can cover whatever costs you need to cover. A personal emergency loan will:

  • Cover the initial costs of the emergency
  • Cover any additional costs
  • Cover living expenses if you need to take time off
  • Help you get back on your feet
  • Prevent you from racking up high-interest credit card debt

So if you’re on the fence about getting a personal loan to help out with an emergency, consider how it will help you not only with the initial costs it can and will help you get back on your feet.

Great Credit Card Alternative

People often feel that going into debt by taking out a personal loan is either unnecessary or a bad financial choice when in reality a personal loan is a much better choice to make in the long run. When a costly emergency pops up unexpectedly most people’s first thought is to charge any costs to their credit cards, this is probably one of the worst things you can do to yourself financially speaking.

When credit cards are involved it’s often because there is no cash available to spend. The major problem with this is that once you charge a medical bill or a new part for your car to your credit card without the cash to pay it off you could potentially put yourself into serious high-interest credit card debt and be paying it for years to come. This is why personal emergency loans are a great alternative to credit cards. With a personal loan you’ll have:

Credit cards can be great financial tools but if used incorrectly they can have a huge negative effect on your finances, chose a personal loan to cover an emergency and you won’t be stuck in credit card debt for years to come.

Can You Get an Emergency Loan with Bad Credit?

Yes, there are many online and alternative lenders out there who exclusively cater to borrowers with low or bad credit. These lenders look at other aspects of your financial profile to determine your creditworthiness like your income, debt-to-income ratio and more. Despite the fast and easy approval process many of these lenders have, interest rates are usually much higher than the rates you’d get with good credit. However, it beats taking out a payday loan or covering your expense with a credit card as you are able to spread your cost into more affordable monthly payments.

Choosing The Best Lender

Taking out a personal loan to cover any unfortunate emergency is definitely the way to go as it will help you maintain a healthy financial standing and improve your financial future. One of the best things you can do to make sure your experience is as beneficial to you as possible is to choose the right lender. Having the best possible lender on your side will allow you to deal with your emergency in a timely and efficient manner and give you the peace of mind that you’ve made the right decision.

You’ll need to do a bit of research before you make your final decision. Emergency loans are often time-sensitive so here are a few tips to help you quickly choose a great lender and get the money you need as soon as possible.

  • Don’t trust any lenders that promise you the world, there are always criteria that need to be met and procedures to follow.
  • Legitimate loan companies will never ask you to make a payment upfront
  • Do a quick Google search for reviews

Our number one piece of advice is to follow your gut feeling and if the term a lender is offering you seem too good to be true then they probably are.

Working with a private lender will not only allow you to cover the cost of your emergency in a timely manner it will help you escape the high-interest credit card trap and provide you with the time you need to make monthly payments and get back on track.


Rating of 4/5 based on 4 votes.

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

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