Your finances, as well as your peace of mind, are impacted by an emergency. Your finances are affected by unforeseen circumstances that put you in desperate need of money. An emergency personal loan may be the solution. It can help you with your need for emergency loans. Also, it can be difficult to arrange for unforeseen expenses. This is where emergency personal loans can help!
This article explains everything you need to know about an emergency personal loan. Check out how to apply for an emergency personal loan. Also, check personal loan eligibility.
What Is An Emergency Personal Loan?
Emergency personal loans are short-to-moderate personal loans. Nearly all banks and other financial institutions provide emergency personal loans. You do not have to keep any property as collateral. That’s because personal loans are unsecured loans.
Getting an unsecured emergency personal loan has become much simpler in recent years. Banks and NBFCs offer quick, unsecured loans. You can avail of it online in just a few clicks. Emergency personal loans are unregulated. So, their interest rates are often higher than those of other loans.
Uses Of Emergency Personal Loans
You can use an emergency personal loan to cover urgent expenses. These can be medical bills or utility bills.
Most emergency personal loans are used for:
- paying off medical billsMedical bills can eat up your funds. That usually happens when a family member is ill. You may need money for an urgent operation or to admit a person.
- paying off student loan debtHigher education has become expensive. At times, an education loan may not cover the expenses. Also, it may not cover every expense associated with higher education. For instance, it cannot cover living, travel, or any other related costs.
- taking care of wedding costsIndian weddings are quite expensive. A grand Indian wedding might wind up costing a lot of money. Thus, it may put a strain on your finances.
- Making an emergency paymentYou may want to combine your many debts into one. This can be done to get a cheaper interest rate.
Features of Emergency Personal Loans
These are some of the main features of emergency personal loans:
- Can Use it AnywhereThis is one of the major benefits of an emergency personal loan. You can use the loan amount for anything you need. This can be a payment for:
- a wedding,
- home renovations,
- education fees,
- medical expenses
- or other needs.
- TenureEmergency personal loans can have a term of 1–5 years. Each bank has different terms for tenure. So, make sure you keep tabs on it.
- No Collateral
Emergency personal loans are unsecured. So, you do not need collateral. Also, you would need a guarantor for these loans.
- Easy DocumentationEmergency personal loans need less paperwork. The only documents you need are:
- Proof of identification
- Address proof
- Income proof
- Easy RepaymentEmergency personal loans are repaid with equal monthly installments. You also know them as EMIs. The lender can create a repayment plan. It will help you pay on time. Also, it will improve your credit score. Use an emergency personal loan calculator. That will help you calculate your EMIs easily.
Check Personal Loan Eligibility
Before applying, you must check your eligibility. For instance, it will include the following details:
- You must be an Indian citizen.
- You must be a salaried employee. You should work in either the public sector or the private sector.
- You must be aged between 21 and 60.
- You must have a minimum CIBIL score of 750.
How to Apply for Emergency Personal Loans
Go through the loans given by different banks. Check for details on interest rates and tenure. After choosing a lender, apply for the loan online. You can also visit your nearest bank branch. Keep all your documents handy while applying.
Required Documents for Emergency Personal Loans
You will need these documents for the application:
- Address proof and identity proof. This can be a voter ID, Aadhaar card, PAN card, driving license, or passport.
- Income proof. This can be pay slips, bank statements, etc.
- Form 16 with your current salary certificate. You can also provide two recent salary slips.
- Bank statement for the last 3 months
Important Points to Consider Before Applying for Emergency Personal Loans
While checking for these loans, keep these points in mind:
- Eligibility Requirements Check the personal loan eligibility criteria. Different lenders may have different criteria. Here are some things to keep in mind:
- Having a minimum salary required by the lender
- Meeting the minimum credit score set by the lender
- Being employed
- Interest Rate and Tenure Check the interest rate. Also, find out the tenure of the bank. These two factors directly relate to your EMIs. Keep your monthly income in mind. This will help you check if you can pay your EMIs. Also, it will let you know if you can meet your other day-to-day financial expenses.
Emergency personal loans are very helpful. They can assist many people who need quick access to funds for various reasons. This can be to pay for a funeral, hospital expenses, or other urgent payments. These loans assist people in their time of need.
There are many terms and conditions with personal loans. As a result, you must be well-versed in them. These include:
- The interest rate
- Your eligibility
It is important to go through these details well. Taking a loan can impact your financial future. So, you should pay your EMIs on time. For more articles like this, visit Piramal Finance today!