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Emergency loans

Emergency loans

  • Check your eligibility for an emergency loan without affecting your credit score
  • Compare personal loans from trusted lenders

What is an emergency loan?

An emergency loan isn’t a specific type of loan – it’s a way of borrowing money to cover an urgent expense, such as car repairs or a new boiler. When you see ‘emergency loans’ advertised, they’re typically for unsecured personal loans. This means you don’t need to put up an asset, such as your home or car, as security.

But emergency loans can be expensive to pay back, particularly if they’re from short-term or payday lenders. And it’s not a good idea to take one out if you’re already relying on other debt to get by.

Borrowing should never be a rash decision. Even when it feels like an emergency, it’s important to consider your options carefully and be sure you can pay back what you borrow.

Can you get emergency loans with bad credit?

It’s possible to get emergency loans for bad credit. But if you have a poor credit history, it can be harder to borrow money in a hurry.

As a rule, the better your credit rating, the quicker and easier it will be to find a suitable loan. But lenders also look at other factors including your income and outgoings, so it’s not all judged on your credit history.

If you do qualify for a bad credit emergency loan, it’s likely you’ll only be able to borrow smaller sums and be charged a higher interest rate too. This is because lenders consider you to be a bigger risk than somebody with a good credit history.

Where can I get an emergency loan with bad credit?

At Compare the Market, we can help you look for bad credit loans from trusted lenders. Use our eligibility checker to see which loans you might be accepted for. It’s a soft search, so it won’t affect your credit score.

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You can also get emergency loans for bad credit from payday lenders. But payday loans come with very high rates of interest, so treat them with extreme caution.

You can’t compare payday loans with Compare the Market.

How to get an emergency loan

There are a number of ways you could take out a loan in an emergency:

Personal loan

With a standard bank loan, you can often have the money in your account within hours of applying – especially if you already have a bank account with the lender.

But you’ll usually have to borrow at least £1,000, which may be more than you need. And you may need a good credit score and income to qualify for the best interest rates.

Credit union loan

You’ll need to be a member of a credit union to apply for this type of loan. But you can often apply for a loan and membership at the same time, which means you could get money quickly if you need it.

Interest rates on credit union loans may not be as low as the cheapest personal loans around. But you can usually borrow a smaller amount, for example if you just need a few hundred pounds.

Council loan

Several local authorities offer interest-free loans for homeowners who need to carry out emergency repairs or energy-saving upgrades to their homes. For instance, installing a new boiler or fixing the roof.

Schemes vary across the country, so check with your local council to see if you’re eligible.

Bridging loan

If you want to borrow a large amount of money for a short time, a bridging loan can tide you over while you’re waiting for a separate sum of money to arrive. It’s most commonly used for buying a house when you’re still waiting for the sale of your current property to go through.

A bridging loan is a type of secured loan. This means you’ll need a high-value asset, such as your house, to use as security against the money you borrow.

It may seem like a short-term fix, but a bridging loan can be risky. If you’ve secured your home against the loan, you risk losing it if you can’t make the repayments.

You can’t compare bridging loans with Compare the Market.

Emergency loans to avoid

Go online and you’ll find a whole heap of emergency loans advertising quick ways to borrow money.

But many of these so-called ‘emergency cash loans’ come with very high interest rates.

Don’t trust any lender advertising emergency loans with guaranteed approval. Under Financial Conduct Authority (FCA) rules, lenders must always perform a credit check on you when you apply for a loan.

Even if you need to take out a loan in an emergency, it’s probably best to avoid the following types of borrowing:

Payday loans

A payday loan is a high-cost, short-term loan that you’ll typically need to pay back within a month. Payday loans are usually for smaller amounts of money, often from £50 up to £1,000.

The overall cost of borrowing with a payday loan is capped by the FCA, but you can still legally be charged up to 0.8% in interest each day. That could be up to £2 a day on a loan of £250 – or up to £60 in interest over 30 days.

Penalty fees can also add up quickly, so if you can’t pay off the payday loan in time, you could end up in even more debt.

Under FCA rules, you should never have to pay back more than double what you borrowed with a payday loan. However, even with that protection, it can still amount to a very expensive loan. 

For information and advice on payday loans check out MoneyHelper

Logbook loans

A logbook loan is an expensive and risky type of loan that’s secured against your car. The lender takes ownership of your vehicle until you’ve finished paying back the loan plus interest.

If you can’t make the payments, you could lose your car.

Doorstep loans

These are also known as home credit or home collection loans. When you take out a doorstep loan, the lender comes to your home to collect the repayments.

Doorstep lenders typically charge the highest annual percentage rate (APR) of any type of emergency loan.

Although doorstep loan providers must be regulated by the FCA, they’re not currently covered by the same interest and cost caps as payday loans.

Please note that you can’t compare payday, logbook or doorstep loans with Compare the Market.

If you do decide to take out any of these types of loan, make sure the lender is authorised by the Financial Conduct Authority and listed on its Financial Services Register.

A money lender who isn’t authorised by the FCA is known as a loan shark. They’re breaking the law and you should stay well away.

How long does it take to get an emergency loan?

If you have a good credit score, a personal loan could be one of the quickest ways to secure an emergency line of credit.

If your application is approved, some lenders will transfer the money on the same day. Others may take a little longer, but often no more than a couple of days.

How much can you borrow with an emergency loan?

Most banks and building societies offer personal loans from £1,000 up to £25,000. But you should only borrow the amount you need, and never more than you can afford to pay back.

Use our loan calculator to help you work out how much you could afford to borrow.

Advantages of an emergency loan

Here are some of the pros of taking out a personal loan in an emergency:

  • Quick access to the money you need. Depending on the lender, the cash could be in your account within 24 hours.
  • Personal loan rates are usually fixed, so you’ll know exactly how much you need to pay back every month. This can help with budgeting.
  • If you’re confident you can make the repayments on time, an emergency loan could help you through a short-term cash crisis.

Disadvantages of an emergency loan

Here are some of the disadvantages of taking out a personal loan in an emergency:

  • Many personal loans are only offered to people with good credit ratings.
  • You might not know the exact interest rate you’ll get until you apply.
  • You could end up in more debt if you rush into a loan and can’t make your repayments.
  • Unsecured personal loans are typically offered for amounts over £1,000, so you may be tempted to borrow more than you need.
  • There may be fees to pay, such as late payment fees or an early repayment charge.

What are the alternatives to an emergency loan?

If you need to borrow a small amount of money to see you through a cash crisis, there are other ways to consider:

  • Family or friends – probably the quickest and easiest option, as long as it doesn’t cause any awkwardness or friction.  
  • Overdraft – an approved overdraft with your bank can be quick to set up and could be a useful financial safety net in the short term. But be aware that interest rates can be high.
  • Credit card – if you need to pay for something in a hurry, a credit card lets you buy upfront and then pay later. And if you qualify for a 0% purchase credit card, you could spread the cost over a set period without paying interest. Just make sure you make at least the monthly minimum payments on time and pay back the full balance before the 0% period ends.
  • Salary advance – your employer might be able to offer you an advance on your salary to cover the emergency. This means you’ll receive less than usual when your payday comes around, so you’ll need to budget carefully.
  • Government loan – if you claim benefits and need financial help in an emergency, you might be eligible for a Budgeting Loan

Where to find help if you need an emergency loan

If you’re already struggling with debt but need money urgently, it’s best to seek advice from a debt charity before taking out a loan. Getting further into debt could end up making the situation worse. 

Organisations including Citizens Advice, StepChange and National Debtline offer free financial advice and could help you access any benefits or grants you may be entitled to.

Frequently asked questions

Does an emergency loan impact your credit score?

Yes, applying for any type of credit will impact your credit score. This is because you’ll need to undergo a credit check, which will be marked on your credit file.

If you use our eligibility checker, you can see which loans you might be eligible for before you apply. It’s a soft search and won’t impact your credit score.

Are interest rates on emergency loans higher?

It depends on the type of loan as well as your individual financial circumstances. Interest rates on payday loans, for example, are very high.

When you see a loan advertised, it will typically show a representative APR. This won’t necessarily be the APR you’re offered.

Lenders only have to offer the advertised APR to 51% of customers who qualify for the loan – usually the ones with the best credit ratings. Other customers may have to pay a higher rate of interest.

How much will an emergency loan cost me?

The overall cost of your emergency loan depends on:

  • The APR you get
  • How much you borrow and over what length of time
  • Being able to make payments on time and avoid any penalty charges.

What happens if I can’t repay my emergency loan?

Miss a loan repayment or pay late, and you could be charged a penalty. If you repeatedly fail to meet your repayments, your lender may send you a default notice.

Take out a secured loan and fail to keep up with repayments, and it could lead to repossession of the property or asset you used as security. If the loan is unsecured, the lender could pass the debt to a collection agency or take you to court.

And missed repayments could have a negative impact on your credit score.

If you’re struggling to pay back your loan, talk to your lender as soon as possible. They should offer help and support; for example, by suggesting an affordable repayment plan.

Worried about debt? MoneyHelper offers information and advice on managing your debts.

Are there emergency loans for unemployed people in the UK?

If you receive certain benefits, like income support and income-based jobseeker’s allowance, you may be eligible for an interest-free Budgeting Loan from the government to cover urgent expenses.

With this loan, your repayments will be taken directly out of your benefit payments if you qualify.

If you’re on universal credit, you may qualify for a Budgeting Advance instead.

You could also find that you’re eligible for a small personal loan from specialist lenders, who base their affordability on your benefit income. But be careful not to borrow more than you afford to repay, including the interest.

Are there emergency loans with guaranteed approval from a direct lender?

In the UK, there’s no such thing as a guaranteed approval emergency loan or an emergency loan with no credit check. The FCA requires all lenders to perform a credit check before they approve a loan application.

It doesn’t matter if you’re looking for an emergency loan through a broker or from a direct lender. Any lender offering guaranteed approval is not regulated by the FCA and should not be trusted.

What do I need to get a loan?

When you apply for a loan, you’ll have to undergo a credit check. It will help if you have a good credit score, but the exact criteria for a successful application can vary between providers. Generally, you also need to be:

  • Age 18 or over (in some cases it could be 21)
  • A UK resident
  • Earning a regular income
  • On the electoral register
  • A bank customer with an active account
  • Able to afford the repayments.

Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility. 

Author image The Editorial Team

What our expert says...

Needing money in a hurry can put you in a vulnerable position. You may be tempted to take up an enticing offer you found online or opt for a payday loan to see you through until payday. Many of these types of loans are risky and incredibly expensive. Just be aware that a short-term cash crisis could turn into a long-term debt problem if you can’t afford to pay off your loan. 

- The Editorial Team, Experts in personal finance, insurance and utilities

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Page last reviewed on 31 MARCH 2025
by The Editorial Team