Options to consider during a financial emergency - personal loan, gold loan, loan against credit card

There are various options to quickly get hold of funds in case of an emergency. Find out what they are.

Need emergency funds quickly.

Life has a way of throwing curveballs at us no matter how much we plan. These challenges often turn into emergencies, and most emergencies need one thing - money. While you may have set aside a corpus for emergencies, you might need additional support if the emergency fund is not sufficient.

In cases of financial emergency, there are various credit facilities you can choose from. Here are some of the options to borrow money:

1. Loan against credit card

Your credit card has a cash advance feature that allows you to withdraw funds from the ATM whenever you need money. If your savings account does not have sufficient funds and you need a loan, you can opt for this fast loan and get funds up to your credit limit for the short term. The annual interest rate could range from 23-42% per annum.

Alternately, you can also take a loan against your credit card at a lower rate, which is easy to avail as well. Thus, a cash advance should always be avoided.

Word of caution: Please note that interest rates start to accumulate from day 1 for loans against Credit Card and thus should only be availed if absolutely necessary. Also, there could be applicable withdrawal charges, which vary from card to card. So, check for the same before opting for the same.

Alternately, you can swipe the expense on your credit card and then convert it to EMI. This would save a lot of charges and interest.

Related: Tomorrow Makers Guide To Building Your Emergency Fund

2. Personal loan

Personal loans are unsecured loans that you can avail of to meet any financial need that may arise. The repayment tenure goes up to 5 years in most cases and the interest rates are affordable of 10-15%, so you can repay the loan in easy monthly instalments.

3. Gold loan

If you have gold assets to your name, you can pledge them and avail of a loan against their value. Gold loans are offered by many lenders and they give you funds for any financial need that you might have. The rate of interest could range from 7-15% based on the value and quality of gold and tenure of the loan availed as well as credit rating.

4. Loan against securities

If you have investments, life insurance plans, fixed deposits, and other deposits, you can use them as collateral and avail of a loan. Many financial institutions offer loans against securities held in your name. The loan value, however, might be limited as it depends on the value of the securities that you pledge. The rate of interest could range from 8-18% and some applicable charges on transactions as well.

Related: 5 Assets That You Can Liquidate Quickly In Case Of An Emergency

5. Loan against property

You can avail of substantial funds if you have a residential or commercial property in your name. Simply mortgage the property and get money up to 80% or more of the property’s value. A loan against property has a lower interest rate since it is a secured loan and offers longer repayment tenures so you can pay off the loan more easily. The rate of interest usually ranges from 8 to 10.5% based on the loan slab and it depends on your credit score and repayment history.

6. Top-up loan

A top-up loan is available for existing home loan borrowers. As the name suggests, this is an additional loan that you can take on your home loan for meeting personal financial needs. The interest rate is low and you get a longer tenure for repayment. The rate of interest is usually lower than the rate on the existing loan and also depends on your loan repayment track record. 

With all these loan options available, you now know how to get money in an emergency. Find out how to get a loan online and assess these options to find the most cost-effective source of finance for your emergencies.

Life has a way of throwing curveballs at us no matter how much we plan. These challenges often turn into emergencies, and most emergencies need one thing - money. While you may have set aside a corpus for emergencies, you might need additional support if the emergency fund is not sufficient.

In cases of financial emergency, there are various credit facilities you can choose from. Here are some of the options to borrow money:

1. Loan against credit card

Your credit card has a cash advance feature that allows you to withdraw funds from the ATM whenever you need money. If your savings account does not have sufficient funds and you need a loan, you can opt for this fast loan and get funds up to your credit limit for the short term. The annual interest rate could range from 23-42% per annum.

Alternately, you can also take a loan against your credit card at a lower rate, which is easy to avail as well. Thus, a cash advance should always be avoided.

Word of caution: Please note that interest rates start to accumulate from day 1 for loans against Credit Card and thus should only be availed if absolutely necessary. Also, there could be applicable withdrawal charges, which vary from card to card. So, check for the same before opting for the same.

Alternately, you can swipe the expense on your credit card and then convert it to EMI. This would save a lot of charges and interest.

Related: Tomorrow Makers Guide To Building Your Emergency Fund

2. Personal loan

Personal loans are unsecured loans that you can avail of to meet any financial need that may arise. The repayment tenure goes up to 5 years in most cases and the interest rates are affordable of 10-15%, so you can repay the loan in easy monthly instalments.

3. Gold loan

If you have gold assets to your name, you can pledge them and avail of a loan against their value. Gold loans are offered by many lenders and they give you funds for any financial need that you might have. The rate of interest could range from 7-15% based on the value and quality of gold and tenure of the loan availed as well as credit rating.

4. Loan against securities

If you have investments, life insurance plans, fixed deposits, and other deposits, you can use them as collateral and avail of a loan. Many financial institutions offer loans against securities held in your name. The loan value, however, might be limited as it depends on the value of the securities that you pledge. The rate of interest could range from 8-18% and some applicable charges on transactions as well.

Related: 5 Assets That You Can Liquidate Quickly In Case Of An Emergency

5. Loan against property

You can avail of substantial funds if you have a residential or commercial property in your name. Simply mortgage the property and get money up to 80% or more of the property’s value. A loan against property has a lower interest rate since it is a secured loan and offers longer repayment tenures so you can pay off the loan more easily. The rate of interest usually ranges from 8 to 10.5% based on the loan slab and it depends on your credit score and repayment history.

6. Top-up loan

A top-up loan is available for existing home loan borrowers. As the name suggests, this is an additional loan that you can take on your home loan for meeting personal financial needs. The interest rate is low and you get a longer tenure for repayment. The rate of interest is usually lower than the rate on the existing loan and also depends on your loan repayment track record. 

With all these loan options available, you now know how to get money in an emergency. Find out how to get a loan online and assess these options to find the most cost-effective source of finance for your emergencies.

Expert Article block example

NEWSLETTER

Related Article

Premium Articles