While it is advised to have a contingency fund to overcome financial emergencies, very few manage to have one. In such a situation, taking a loan is the only option.
The Covid-19 pandemic and the country-wide lockdown introduced to contain the spread of the virus has hit the economy hard. While many SMEs have not yet been able to restart their business even after the lockdown was lifted, bigger companies are struggling to achieve the pre-COVID level of business. Between all these, employees of these organizations have been the worst hit. While many employees have lost their jobs many have witnessed pay cuts. In such a situation it is obvious that one will face short term financial stress.
Here are five ways you can avail a quick loan in case of any emergency.
1. Gold Loan
It is easier to get a loan against your gold jewelry or ornaments with gold prices near record-high levels, . This loan interest rate is lower as compared to personal loans as it is a secured loan and is issued within hours. One can avail up to 90% of the value of gold as a loan in the present time.
3. Loan against FD
A fixed deposit (FD) then can get an instant loan by pledging that FD in case of any emergency. As the margin amount is very less and one can get up to 90-95% of the deposit amount as loan making it one the best sources for meeting immediate financial needs. Typically banks charge 2% higher than the FD rate as the interest rate on these loans.
4. Loan from Fintech Startups
App-based fintech start-ups in India provide hassle-free online loans quickly based on your eligibility. Among the younger population who are new to credit and need flexible amounts for short-term expenses, this option is relatively popular.
4. Pre-Approved Personal Loans
Banks typically offer these loans to salary account holders who maintain a healthy balance in their savings account. This is another convenient option to avail of the quick loan in case of an emergency.
5. Covid-19 Personal Loan
Many state-owned banks have introduced a new category of personal loans to help their customers meet Covid-19 induced financial stress. These loans are called Covid-19 personal loans. Banks have stringent eligibility criteria for these kind of loans. They typically offer Covid-19 personal loans to salaried employees or to those employees who have a salary account in their bank.