Emergency Loans: What They Are & Where to Apply for?
Looking for someone to help you in paying a huge bill of hospital? If you find nobody to stand with you at this crucial time, don’t get worried. Take the help of banks/ financial institutions for an emergency personal loan. Apart from it, you can also apply for your required loan amount on different online loan apps.
Going online is an easy procedure to get a loan. Just fill up the form, and wait a little until you will get your eligibility report. The time you have passed your first round i.e. have all necessary eligibility criteria for the loan, you have to submit the required documents i.e. the next step is “Documentation” process. After successful completion of the documentation process, lenders will provide you the loan according to your need and your eligibility.
It is suggestible to apply for the loan on an online platform as it is a fast and hassle free procedure. In simple words, you will get instant loan from an online lender because the disbursal process is fast and it does not need your physical involvement i.e. you don’t need to stand in a long queue in the bank to get approval. But, in case you think that banks are the best and reliables option you can go the same.
Before moving forward, let’s discuss the emergency loan, types of emergency loans, required eligibility and where to apply for the loan.
Get to Know About Emergency Loan
Emergency loan, often referred as “unsecured personal loan” is arranged by a financial institution for helping the needy people. As it is an emergency loan, the lenders will charge a minimal interest rate (interest rate is according to RBI guidelines) for the loan amount. Moreover, it has flexible tenure i.e. repayment option is easy.
Besides banks, you can also prefer Online Lenders to borrow money in any kind of emergency or in any unexpected situation according to your need. In simple words, nowadays, you get multiple options to avail loan either you choose a personal lender or a payday lender. Don’t forget it is an unsecured loan, so it might be possible that some lenders ask you to put up some assets to borrow money.
Types of Emergency Loans
There are several kinds of Emergency loans. Go through the important ones mentioned-below:
Personal Loans: Emergency Loans as discussed above are unsecured personal loans. To get this loan, the lenders check your CIBIL, and bank statements to know the income related history. Besides it, some lenders provide secured personal loans to the borrower on their property, cars or other personal assets.
Title Loans: This is a kind of loan which is provided on your vehicle. If you fail to repay the title loan, you have to give your titled vehicle to the lender.
Payday Loans: Payday loans are small loans. Nowadays, several online lenders are involved in providing this loan. To get Payday loans, CIBIL score doesn’t mean a lot, so it is easy to obtain. But, it is suggestible to avoid this loan as it has high interest rates.
Credit Card Advances: Credit card is nowadays used to borrow cash but you avail it whenever you have available credit balance. Generally, avoid this kind of loan/ advance as its interest rates are very high.
Reasons for Taking Emergency Loans:
An emergency loan is a kind of relatively small personal loan that you can borrow in an unwanted or unexpected situation. Based on your requirement, the amount of the loan will vary. You can take the loan to cover any emergency like
- Hospital bill payment/ medical emergency,
- Car repairing charges
- Covering expenses for home repairing
- Extra fund requirement for unplanned expense, etc.
This is an easy financial cushion available in flexible tenure and at an affordable rate of interest.
Eligibility for An Emergency Personal Loan
To avail emergency loan, you have to fulfil some eligibility criteria which may vary. Have a look at a few common eligibility criteria:
- Individual must be an employed person
- Must be a citizen of India
- No case of bankruptcy
- Satisfactory credit score
- Meet age criteria and minimum income requirement
Document Required:
The documents required while applying for an emergency loan:
- Income proof
- Proof of employment
- Valid ID proof (PAN card, Aadhaar card)
Factors to Consider Before Choosing An Online Lender for Emergency Loan
Considering your requirement, you can choose the lenders who can provide a quick loan with minimum effort. You can avail loan from personal lender, payday lender, credit card issuer or other emergency loan lenders at predefined interest rates. Avail a loan based on factors like:
Interest Rates: Compare and choose the one that provides a loan at the lowest interest rate.
Charges: Check the late payment penalties and origination fees of the lender and only after that select the appropriate one to avail loan.
Quick Loan Disbursal: Lenders taking less approval time is the best option for you.
Repayment Terms: Select the lender which gives you a few months to pay off your loan.
Where to Apply for a Loan
Banking Institutions:
Several local banks, online apps and credit card issuers are involved in providing loans. You can select the appropriate one according to your need. Here is the list of places from where you can apply for an emergency loan:
Banks:
These are the safest and most reliable financial institutions to rely on for the loans. First of all, they check your eligibility and only after that approve your loan application. The processing methods of banks are different from other lenders.
Online Lenders:
In recent days, a number of online lenders are involved in providing an emergency loan. A few of them can check your credit score and disburse the amount according to your score. It is recommended to take loan from online lenders as the entire procedure they follow from loan approval to loan disbursement is fast. Moreover, it is an effortless process i.e. you can get the loan from online lenders without going anywhere, just sitting in front of your system. Moreover, it requires less documentation as compared to banks.
In some cases, you find that the interest rates of certain online lenders are high, so decide and then choose the option to avail loan.
