Many people make the mistake of
heading to their bank when they need extra cash in a hurry. However, most banks
do not specialize in emergency loans for a variety of reasons. The good news is
that there are other options for finding emergency funds to pay for emergencies
like car repairs, medicine or other unexpected expenses.
This article will explain why banks
are not usually the best choice for emergency lending products and where you
can go instead to find the money you need, when you need it.
The Application Process
Banks typically require a long
application for customers in search of a loan. These applications ask for a
wide range of information, from your income amount to a listing of all your
current financial obligations.
In addition to the large amount of
information required on these applications, banks also assess a fee for simply
turning in an application for consideration. If you are searching for emergency
loans, you probably don't have time for a lengthy application, and you
definitely don't have extra money to put down at the front of the application
process.
Loan Processing
Once the application is submitted,
the bank begins verifying your financial information. There are usually one or
two bank employees that are involved with the processing part of the loan, and
then a loan officer will make the final decision as to whether or not to
approve your loan. Credit reports must be pulled, income verified and a
valuation of your home might be needed.
In addition to the time involved
with such a process, there may be additional expenses for a credit report and
home appraisal. The processing is lengthy and not typically the characteristics
that efficient emergency loans have.
Once the loan processing is
completed, the file may sit on the desk of a loan officer for a period of time
before it is approved. If the loan officer is not happy with the information
included in the loan packet, it may go back to the processing department for
additional work. You may be contacted to provide additional information as
well. The entire process can end up taking weeks, which is not helpful for a
customer looking for emergency loans to satisfy an immediate financial need.
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