Perhaps the least controversial but least accessible option is your local commercial bank or credit union. Here these institutions could provide an emergency loans as part of a home equity loan, in which equity you have invested in your home serves as the collateral. Secondly, some banks offer personal loans if you have a certificate of deposit through the bank. Thirdly, and given your credit history, a bank or credit union may offer you an unsecured loan. This means you do not put any collateral up against the loan, but you will have to pay a higher interest rate.

Now using a traditional institution may be more difficult. Thus the biggest and most popular method for consumers to acquire an emergency loan is through the so-called “Payday loan”. This is the type of loan in which cashed is advanced to the customer in proportion to their future paycheck. When applying for this type of loan, it’s important to understand the laws or regulations in your state or country regarding interest rates. In the United States, interest rates are determined by states, while in other countries, like Canada, there are actually federal laws limiting the interest rate. Make sure to look up the interest rate using, for instance, the internet to avoid those charging usurious rates. Also, be on the look out for hidden fees. Some unscrupulous lenders will offer a reasonable interest rate only to tack on hidden fees in the contract. Again, state laws may or may not protect you from this so read the fine print!

Another major type of emergency loan is the so-called “Title loan”. Although not as popular or ubiquitous as the payday loan, the title loan is still a popular option when it comes to emergency loans. Here too, laws and regulations are in place to protect the consumer from usurious interest rates. The key to understanding this market is that the value of your loan is being collateralized by the title of your car. You must be the full owner of the title, with the loan to the car fully paid. Furthermore, your loan amount will be measured against the amount your car is worth in the open market, so there is certainly a limit to how much you can borrow.

In conclusion, the safest route for acquiring an emergency loan is through federally insured banking institutions or credit unions. However, given the credit history demands of these institutions, the next best options are the payday and title loans described above. In both of the cases, the burden is on the consumer to do his due diligence and understand the law and regulations in their particular locality as regards interest rates and hidden fees. With an understanding of the term and structure of these loans, you should be able to choose which option offers the safest and most reliable form of loan for your emergency needs.