How Personal Loans Help During An Emergency

Emergencies or sudden financial troubles come unannounced. Situations such as losing a job, need for immediate home repairs or attending to a sick family member who needs medical intervention can catch you off guard. In such times, unexpected and unprepared expenditures can topple your budget and dig into your savings.

This is where the instant personal loan or emergency cash loans can help. They provide quick funds just when you need them, and that too without disturbing your savings. Here is the list of emergencies in which a personal emergency loan can be a saviour.

Various Emergency Situations When Personal Loans Can Help

1. Debt Consolidation 

Why bear the weight of a high-interest loan when you can pay everything off at once? Borrowers these days are using emergency personal loans to pay off high-interest obligations such as credit card bills, high-cost business loans, and more. Debt consolidation is one of the most common reasons for the high demand for an urgent loan.

2. Medical Emergency

Today, who is not concerned about rising healthcare costs and the chances of developing diseases at a young age? Medical expenditures are so high these days that sometimes even health insurance proves insufficient to pay the medical care costs. As a result, a large number of people are taking the help of emergency personal loans online to manage the situation.

3. Wedding Expenses

Weddings are considered to be one of the costliest affairs in India. Ring ceremony, jewellery, banquet hall or hotel reservation, stay arrangement for guests—the list of expenses is endless. As a result, instead of drying up their savings, more and more people are turning towards urgent personal loans.

4. Children Education

If you want to send your child to one of the prestigious universities for higher education, you will need to set aside a significant sum of money. A reputed college will charge lakhs of rupees for popular courses such as MBBS, MBA, and B-Tech. To meet the immediate need for funds for college admission and related costs, you can apply for an urgent personal loan.

5. Relocation

Leaving your hometown and moving to a new city for a job is very common these days. However, moving requires not only you but also your belongings to be transported to a new location. To meet the high cost of relocation, you might want to look for a saviour in an urgent loan or personal emergency loan. 

6. Unplanned Expenses

Sometimes you may find yourself in an unexpected financial crisis. In such circumstances, you can apply for a personal loan urgent basis through an online app or the lender's website. Considered as a saviour during financial emergencies, this emergency personal loan proves its worth during hard times.

7. Home Renovation

The cost associated with home renovation is usually high and has the potential to deplete our savings. Therefore, for home decor and renovation, many people prefer personal loans. 

Also Read: Availing Personal Loans Just Became Super Easy with Digital Lending

Now that you are aware of the emergency conditions in which a personal loan can be used, it is time to move forward and discuss its benefits. 

Benefits of a Personal Loan and How it Works

1. They are enough to tide you over the crisis: The lender is conscious of the urgency of the borrower’s situation and tries to disburse funds accordingly. However, the loan amount can vary from lender to lender. It depends a lot on the borrower profile and the factors such as the credit score, eligibility etc. Check the maximum and minimum loan amount offered and discuss your requirements with your lender.
2. No collateral: There is no need for collateral to avail of instant personal loans, so you do not have to worry about your assets or property. The rate of interest may be higher when compared to secured loans but urgent loans enable you to address problems faster.
3. Hassle-free online process: You can avail of these instant cash loans with a few simple clicks from the comfort of your home. All you need to do is fill in the online form, upload the necessary documents, and press submit. The approval takes about 24-48 hours and the money is disbursed directly to your bank account, saving both time and effort.
4. No hidden costs: There are no hidden charges or fees involved in personal loans. The interest charges and terms of the loan are outlined clearly. You need to pay off only what you borrowed, along with the interest accrued. This ensures complete transparency.
5. Flexible repayment tenure: Again, the repayment tenure can differ from lender to lender, but it normally ranges between 12-48 months. Therefore, you can choose the repayment tenure at your convenience.

Also Read: Personal Loans: Applying Online vs Applying Offline

Things to Keep in Mind While Opting for Emergency Personal Loans

• Slightly Higher Rate of Interest – Because it involves a high degree of risk to the lender, they may charge higher rates of interest to safeguard their own interests. This may pinch your finances a bit in the long term, but it is the best bet in a crunch.
• Lenders can be Picky – Although, the application process is quite simple, lenders are a little discerning about certain things such as your credit score, credit history, income, and other debts. They would want to be absolutely certain of your repayment capacity before approving the loan.
• Small Loan Amount – The minimum and maximum amounts that can be borrowed are at the discretion of the lender. If the lender has apprehensions about the borrower’s repayment capacity, they may not want to lend the required amount in full. The final loan, thus, may end up being smaller than what you need.

Wrapping Up

Life can be rough. The most prepared of individuals can encounter turbulent situations where they are in urgent need of funds. While an instant personal loan can have its disadvantages, it is likely the best bet during difficult times. For many, it could be their last resort. Naturally, it is important to understand the terms and conditions thoroughly before applying for these loans. Talk to the financial institution’s representative if you need any clarifications and make a responsible borrowing decision for you and your loved ones.

Frequently Asked Queastions

1. Can personal loans be used for medical emergencies?

Yes, personal loans can be used to cover medical expenses, including hospital bills, surgery costs, and post-treatment care. They provide a flexible financing option when health insurance is insufficient or unavailable.

2. How fast can I get a personal loan during an emergency?

Many lenders offer quick approval and disbursement processes, allowing you to receive funds within a few hours to a few days. The exact time frame depends on the lender's procedures and your eligibility.

3. Are there any prepayment penalties for personal loans?

Some lenders may charge a prepayment penalty if you repay the loan before the end of the term. However, many lenders offer loans without prepayment penalties. Always check the loan terms before committing.

4. How can I get money for an emergency?

You can get money for an emergency through personal loans, credit cards, or borrowing from friends and family. Consider options like payday loans or selling assets for quick cash.

Disclaimer: The post was first published on 26 May 2020 and has been updated for the latest information, freshness, and accuracy.