This Could Be the Best Loan When You Need Money ASAP

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Need money in a pinch? Read on to see why a personal loan could be your best option. 

There may come a point when you need money and can’t afford to wait to get it. If your car needs a major repair and you need to drive to work, for example, then fixing it immediately is imperative. The same holds true for addressing a major repair in your home.

You have several loan options when you need to borrow money. If you own a home, for example, you could take out a home equity loan and access the sum you need. But a personal loan could be a smarter bet when you need money in a hurry.

It’s all about getting that money in your hands

Discover says that the typical home equity loan takes about 55 days to close on from the time of an application. If you’re taking out a home equity loan to do something like finish your basement or put in a pool, that may not be a problem, since you’re addressing a want, not a need.

But if your roof has a problem or your heating system has gone kaput and you need thousands of dollars to fix the issue, you probably can’t afford to wait 55 days, or somewhere in that vicinity, to get access to money. Rather, you might need that money yesterday.

That’s why a personal loan could be a far more optimal solution. Rocket says that most banks and credit unions can close on a personal loan in one to seven business days. But in some cases, you may be eligible for same-day financing. Even if that’s not the case, and you have to wait a few days to get your personal loan proceeds, that’s far better than having to wait almost two months.

It still pays to shop around for a personal loan

When you have an urgent need to borrow, you need an option that will put cash in your hands quickly. And a personal loan fits that bill.

But it still pays to take a day to shop around for personal loan rates and see which lender comes back with the most competitive offer. The lower the interest rate on your loan, the less your monthly payments are going to amount to.

Now, your credit score is going to play a big role in determining what personal loan rate you’re offered. These loans are unsecured, so lenders rely on borrowers’ credit profiles very heavily when setting rates. But if your score is in good shape, then you may be eligible for an affordable rate that keeps your loan payments manageable.

It’s never fun to land in a situation where you need money and can’t afford to wait. A good way to avoid that sort of scenario is to maintain a fully loaded emergency fund.

But if you wind up in a pinch without cash reserves to tap, then you may have to look to borrow. And a personal loan could not only be your most affordable option in that case, but also, your fastest.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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