New Delhi: The Covid-19 pandemic and the nationwide lockdown put in place to contain the spread of the virus have hit the economy hard. While many SMEs have yet to be able to restart their activity even after the lockdown is lifted, large companies are struggling to reach pre-Covid level of activity. Among all this, the employees of these organizations have been hit the hardest. While many employees have lost their jobs, many have witnessed pay cuts. In such a situation, it is obvious that one will be faced with short term financial stress.
While it is advisable to have a contingency fund to overcome financial emergencies, very few manage to have one. In such a situation, taking out a loan is the only option. Here are five ways to get a quick loan in an emergency.
1. Loan against FD
If you have a fixed deposit (FD), you can get an instant loan by pledging this FD in an emergency. It is one of the best sources to meet immediate financial needs as the amount of the margin is very less and one can get up to 90-95% of the deposit amount as a loan. Typically, banks charge 2% more than the FD rate as the interest rate on these loans.
2. Gold loan
With gold prices near record highs, it’s easier to get a loan against your gold jewelry or ornaments. This loan is issued within hours and the interest rate on these loans is lower than that of personal loans as it is a secured loan. In addition, banks offer flexible repayment options on gold loans. One can avail up to 90% of the value of gold as a loan at present.
3. Loan from FinTech Startups
There are many application-based fintech startups in India that provide hassle-free online loan quickly based on your eligibility. This option is particularly popular among the younger population who are new to credit and who need flexible amounts for short-term spending.
4. Covid-19 personal loans
Many public banks such as Punjab National Bank, Bank of Baroda, Bank of India have introduced a new category of personal loans to help their clients cope with financial stress induced by Covid-19. These loans are called Covid-19 personal loans. however, banks have very strict eligibility criteria for these loans. They usually offer Covid-19 personal loans to salaried employees or employees who have a salary account in their bank.
5. Pre-approved personal loans
This is another convenient option for getting a quick loan in an emergency. Banks usually offer these loans to holders of salary accounts who maintain a healthy balance in their savings account.