Need money? Here are the best ways to get an emergency loan
You never know when a financial crisis will strike. The COVID-19 crisis, for example, has disrupted the financial well-being of the working class around the world, especially those who have no financial support and no emergency economy to rely on during such times.
Even though an emergency fund of at least 3 months of spending is essential to face a crisis, it may not be possible for everyone to withhold such savings. In such circumstances, a quick loan turns out to be the only option. However, experts say, you have to be careful and weigh your options and then choose the best possible way to get through.
Here are some options to help you during a financial emergency;
Get help with a line of credit
This type of credit, called a line of credit or line of credit, is a type of unsecured loan that is ideal for people who regularly need small financial help. This is especially for those who need a short term loan to manage their emergencies. Various fintech platforms now offer such small short term credit limits, for an emergency cash flow shortage. One can also get this form of credit even without credit score or bad credit score.
With the help of a line of credit, one can borrow money instantly when needed and then repay it, all for a small fee. Industry experts say timely repayments and good repayment behavior could also improve access to credit and a borrower’s credit scores.
Depending on the loan provider, one can borrow any amount within the approved credit limit and then repay the amount in whole or in part when the borrower has cash. The borrower must pay interest or fees only during the time he has access to the line of credit. Moreover, if required in the future, the line of credit remains available to the borrower to deal with any kind of cash emergency.
Obtain a personal loan
Similar to the line of credit, a personal loan is also an unsecured loan. The difference is that personal loans are generally longer term, fixed term loans offered for a specific purpose. Personal loans have opted for larger loan amounts that can be repaid over a period ranging from 1 to 5 years or from 12 to 60 months. The interest rate on a personal loan also comes with a higher interest rate.
Loan or cash advance by credit card
In case of emergency funds, one can easily apply for an instant loan against his credit card. With that said, experts say all borrowers should know that credit cards are one of the most expensive forms of credit available. Credit cards typically charge various fees such as cash advance fees, interest, and other charges for any unpaid credit. Even though the loan is readily available through a credit card, only 4 percent of the Indian population has access to it.