Most people have a savings account where they keep money for emergencies. However, a substantial fund withdrawal during an emergency leaves you stranded with no money left and looking for more funds. Therefore, consider applying for a short-term loan instead of exhausting your emergency funds and getting the required money in minutes. The following sections cover why a Personal Loan can help overcome financial challenges during emergencies.
Personal Loan as the Best Funding Option During Emergencies
A Personal Loan is undoubtedly an excellent funding option during emergencies. That is because it provides access to instant funds without pledging any collateral or security in exchange. Besides, you only need to fulfil the lender’s eligibility conditions to obtain a loan. After furnishing the required documents, you get approval in minutes and funds directly into your bank account.
The biggest selling point of a short term loan is that you can apply for it online without any branch visits or paperwork. Top lending institutions like Hero FinCorp allow choosing a repayment tenure according to your financial situation. A longer tenure means smaller EMIs but bigger interest outgo while a shorter tenure means bigger EMIs but smaller interest outgo.
How Does a Personal Loan Help During Emergencies?
An instant Personal Loan can provide quick funds for different types of emergencies, including the following:
1. Medical Emergency
A medical emergency may strike at any time, leaving many searching for a quick funding source. The good news is that you may get an emergency loan from various financial institutions to cover multiple costs like surgery, hospitalisation, diagnostic tests, medication, physiotherapy, medical equipment, etc. You only need to complete an online application form and receive instant approval and disbursal.
2. Education Costs
If you plan to pursue higher studies in a reputed institution, you must account for fees, travelling, accommodation, and other living expenses. Joining a foreign institute requires huge sums you can easily source from a short-term loan. With little research, you can seek a Personal Loan at a competitive interest rate to cover education-related expenses.
3. Home Repairs
Need emergency funds for an urgent home repair, such as plumbing, roof replacement, leaky pipe, etc.? All you need to do is apply for a Personal Loan online and get funds disbursed immediately.
4. Wedding Expenses
A Personal Loan may provide emergency funding for various last-minute wedding expenses, such as decor, catering, shopping, etc. When you apply for a Personal Loan for a wedding, the lender does not ask any questions regarding the funds’ end usage.
5. Travel
If you plan to travel to your dream destination, you may get instant funds to finance the trip and pay its cost in easy EMIs. The strategy helps keep your savings intact while letting you achieve your travel aspirations.
6. Debt Consolidation
Do you have outstanding debts you want to repay quickly? Get an instant loan online to repay them instantly rather than paying them on different dates at unique interest rates. Debt consolidation is a great way to save money, given that you pay your EMIs regularly and select a loan tenure aligning with your financial goals.
Benefits of a Short-Term Loan for Emergencies
Let’s look at the benefits of emergency loans.
- Enough to Tide Over the Crisis: Since most aspiring borrowers apply for a Personal Loan during an emergency, financial institutions make conscious efforts to quickly approve and disburse the funds. However, the sanction amount may vary between lenders, depending on your profile, eligibility, credit score, etc. Check the loan amount they offer and discuss your needs with them.
- No Collateral Requirement: An instant Personal Loan does not need any collateral or security against the funds. That means you don’t need to worry about risking your property or assets.
- Hassle-Free Digital Process: You can obtain an instant cash loan from the comfort of your home or office. To apply, complete an online application form, upload the required documents, and click “Apply Now”. The approval takes only a few minutes, and you receive disbursal directly to your bank account without wasting time and effort.
- No Hidden Charges: Personal Loans involve no hidden fees or charges. The loan document clearly outlines the terms and interest charges. You must repay what you borrow with interest while ensuring complete transparency.
- Flexible Repayment: The repayment term may differ between lenders, normally up to 36 months. You can use an EMI calculator to choose the repayment term at your convenience.
Tips to Use an Emergency Loan Responsibly
Short-term loans are the best funding option during emergencies. New-age NBFCs make them easily accessible online. However, you must use them responsibly to tackle financial crises without disrupting your budget. Follow these tips to use an emergency loan responsibly:
- Assess the Urgency: Think about whether the expense is actually an emergency. Can you delay it or cover it with another funding source? Explore the available funding options before applying for a loan.
- Evaluate Your Financial Situation: Before applying for an emergency loan, evaluate your financial standing and understand your income, expenses, and repayment capacity. Borrow only if you are confident of repaying the EMIs on time.
- Research and Compare: Instead of settling for the first loan offer you receive, research various lenders, read terms and conditions, and compare interest rates to find the best deal.
- Read the Fine Print: Read the loan agreement carefully, including hidden fees and charges, to understand the prepayment options, late payment penalties, repayment schedule, etc.
- Make a Solid Repayment Plan: Plan your loan repayment even before applying for one. Creating a budget will let you accommodate the EMIs without stretching your finances.
A short-term Personal Loan can bridge financial gaps during emergencies. It offers quick funding access with usage flexibility and convenient repayments. However, using the loan amount responsibly is crucial to avoiding the cycle of debt. Assess your urgency, research loan options, and make a solid repayment plan to navigate the monetary challenges without disrupting your financial well-being.
