New Delhi: Although an emergency or unexpected circumstance can arise at any time, very few are prepared for it. It is always recommended to set up an emergency fund (equivalent to six months of your monthly income). But very few have it. In the absence of an emergency fund, you will need to finance a medical emergency such as hospitalization with a loan. Here are five ways to get a quick loan in an emergency.
1. Loans against FD
If you have a fixed deposit (FD), you can get an instant loan in an emergency by pledging this FD. It is one of the best sources to meet your immediate financial needs as the margin amount is very small and you can get up to 90-95% of the deposit amount as a loan. Usually banks charge 2% more than the FD interest rate on these loans.
2. Gold credit
It is easier to get credit for your gold jewelry or ornaments. This loan is granted within hours and the interest rate on these loans is lower compared to personal loans because it is a secured loan. In addition, banks offer flexible repayment options for gold loans. You can take up to 90% of the gold value as a loan today.
3. Loans against shares and mutual fund shares
If you don’t have an FD or gold to mortgage a loan, you can get a quick loan in exchange for stocks or shares of a mutual fund system. Lenders offer up to 50% of the value of stocks and mutual fund shares as loans. The interest rate on these loans is the same as the personal loan interest rate.
4. Pre-Approved Personal Loans
This is another convenient way to get a quick loan in an emergency. Banks usually offer these loans to salary account holders who have healthy funds in their savings accounts.
5. Credit against credit card limit
Some lenders also offer quick loans against credit card limits. You can avail this loan if no other option is available. In such a case, your credit card limit will be reduced by the amount of credit you have taken out. Usually, the interest rate on these loans is higher than that on personal loans. It should be noted that additional costs are incurred when borrowing against a credit card limit. The interest you pay on such loans is 18% GST.