Life is unpredictable and sometimes throws emergencies at its best discretion. It may turn out either medical, car repair or travel which, in case of non-planning, will require funds at whatever time. For persons who happen to have nothing saved or planned for during such time, emergency loans usually come in very handy. Internet-based emergencies offer quick, hassle-free cash to sort out various needs.
What Are Emergency Loans?
Emergency loans are unsecured personal loans available in case of emergent needs. Unlike common loans, these are processed as soon as possible and require almost no paperwork. Since they happen to be unsecured, you never have to offer any collateral such as property or gold.
The amount of the loan, the duration to pay back, and the interest rate are determined by the lender, credit score, and the capability of repaying it. Usually, these loans are small-sized loans, like Rs 10,000 to Rs 5 lakh, depending upon your monthly income, having an extremely flexible payback duration which can range from months to even years. In today's world, owing to digital lending platforms, the process of taking emergency loans has become absolutely effortless.
Here's a step-by-step guide to applying for emergency loans online.
1. Research Lenders
There are many fintech companies, banks, and NBFCs that offer emergency loans online. Research thoroughly to find a lender that suits your requirements. Look for key factors such as loan amount, interest rates, repayment tenure, and customer reviews.
2. Check Eligibility
Before making the application, check the eligibility criteria of the lender. Mostly, you should be:
Between 21 and 60 years.
Salaried with a stable income from a job or business.
A good credit score is needed for quick approval, which is above 650 most of the time.
3. Gathering Necessary Documents
While online lenders ask for highly minimum documentation. Some examples include:
Evidence for identity: Aadhaar or PAN card
Proof of residence
Proof of income, salary slips, banking statements, etc.
4. Making an Online Application
Go to the lender's website or download their app. Fill in the application form, upload the required documents, and submit your request.
5. Instant Approval and Disbursal
Most of the digital lenders give instant approval, sometimes in just 5 minutes, if your application meets the criteria. Once approved, the loan amount is transferred directly to your bank account usually within 24 hours.
Advantages of Online Emergency Loans
Quick Processing: Most lending platforms approve and disburse emergency loans within hours.
Convenience: The application to the disbursal process is fully done online, thereby eliminating going to a branch.
Flexible Tenures: This allows the borrower to select the period of repayment that suits him according to his ability and money power.
No Collateral Required: Being an unsecured loan, you do not have to mortgage any of your assets, or need any collateral or guarantor.
Emergency loans are easy, but there are some disadvantages also associated with them:
High Interest Rates: Since the loans are unsecured and processed very fast, the interest rates are much higher than the conventional loans.
Loan Scams: Avoid fake lenders. Go with the right platforms only, and check their credentials.
Impact on Credit Score: Missed repayments can also badly impact your credit score.
For most people, emergency loans have become an essential financial need. Nihit, a 27-year-old professional from Delhi, narrated his experience.
"I fell sick last year, and a medical emergency cropped up that required Rs 50,000, which is a huge sum and an urgent situation. I applied for an emergency loan online. The amount gets credited within a few hours to your account, which is such a great relief in trying times," Nihit, bringing out the convenience aspect and how important these loans are when you need them the most.
Tips on Responsible Borrowing
Borrow Only What You Need: Emergency loans are short-term remedies, not long-term financial instruments.
Compare Interest Rates: Don't settle for the first lender. Compare options to find the best deal.
Read the Fine Print: Pay attention to hidden charges like processing fees and penalties for late payment.
Repayment Plan: Make sure you can repay the loan comfortably within the tenure you have chosen.
Emergency loans are a reliable source to meet any urgent financial crises. It enables accessing funds at any given time when needed most. It should, however, be used responsibly. There are many online lenders available; so one must choose a credible lender and read the terms before availing of a loan.