Life is full of surprises, and unexpected expenses can be very stressful. When you are experiencing an emergency with your finances, you may have no other choice than to apply for a loan. The reasons for needing money can be personal or related to a business. If your credit union or bank has turned you down for a loan, you will need to consider alternative lending options, like an emergency personal loan.

Emergencies That Require a Loan

There are different types of money emergencies that may force you into getting a loan:

• Car repairs. When your car breaks down, you may find yourself stranded and unable to get to work. Repair costs can soar into the thousands, and you will not know how much the bill will be until the mechanic gives you an estimate. That is what makes planning for car repair costs so challenging.

• Credit card balances. Having multiple credit card accounts can make finances tricky because of the different balances and payment dates. If you are not on time with payments, you will be hit with late payment fees, which will lower your credit score. If you are unable to make any payments, you will have to refinance to get back on track.

• Business expenses. Opening a business often requires the investment of personal assets, including savings. When the business does not make a quick profit, you may be unable to pay yourself with business funds. In addition, if your personal credit score goes down, this will hurt the credit rating for your business as well.

• Weddings. Getting married is one of life’s biggest events with an average cost of over $31,000. Once the planning is underway, you may find the wedding will cost more than you anticipated, and if family and friends have already booked their travel, it is difficult to make any changes.

These scenarios call for emergency loans, but this may be out of reach for you. At this point, you can look into alternative loan options.

Personal Loan Solutions

A personal loan differs from a standard loan issued by a credit union or bank. If you are experiencing an unexpected money emergency, you can consider the following options:

• Unsecured loan. When you take out this type of loan, you are making a promise that you will pay the money back. You will need to keep your word because you are not putting up any collateral. These loans are based on the amount of money you make each month. The lender will base its decision on whether you have enough income to repay the loan.

• Secured loan. You also have the option of putting up a valuable asset to obtain a loan. This could be your home, your car, valuable artwork or a piece of fine jewelry. If you have stocks and bonds, these can be used as collateral for an emergency loan.

Business Loan Solutions

Your business can have a large impact on your personal finances, especially if you have put your own cash into the company. When you have a personal financial emergency, you could find yourself without any backup savings. If your business is going through a challenging time, you can consider the following options.

• Presales of products. If your business has an established customer base, you may be able to pre-sell your products to raise cash. This means that the customers will pay for the products before they are actually available. You are obligated to produce the products or services when promised to make this option work.

• Factoring. It is possible that your business is short of cash because customers have not yet paid. Factoring works by using unpaid invoices as loan collateral. The lender collects the money from the customers to recoup the funds.

• Family and friends. As a last resort, you can appeal to family members and friends to loan you money in an emergency. You can offer business assets, such as equipment and vehicles, to reassure the person that you will pay the money back.

Financial emergencies can occur suddenly. The experienced staff at DR Credit is always available to help you find the best loan solution.