It is essential to have a contingency fund to tackle financial emergencies. However, very few have a contingency fund. In such a situation, taking an instant personal loan is the only option left. Nevertheless, with many credit options available, selecting one suitable option may turn out to be a tedious task.

If the Coronavirus pandemic has taught us one life-lesson, it is that a financial crisis can hit you at any time. In the past few months, lakhs of employees lost their jobs while many others witnessed pay cuts. It is evident that in such a situation, people have faced short-term financial stress.

Here are the top seven ways or credit options to avail an instant personal loan in an emergency.

  • Credit Option — Personal Loan: Personal loans are unsecured loans. You don’t have to pledge anything to get an instant personal loan. Banks usually check your history and credit score before sanctioning you a loan. The interest rate on a personal loan varies for different banks.

An instant personal loan’s interest rate depends on the loan amount, tenure, the credit score of the borrower, etc. The interest rates broadly range from 8.5% to 25% p.a. And the loan tenure ranges from 1 to 5 years, which also varies from lender to lender. You have to repay your loan in the form of EMIs.

Most banks also charge processing fees, prepayment charges, and part-prepayment charges on personal loans. As a loan applicant, you usually need to submit documents such as address proof, income proof, and identity proof. The document requirements may be somewhat different for different types of loan applicants such as salaried and self-employed.

A personal loan is one of the most popular credit options for financing your needs. The interest rates for instant personal loans range from 9% to 24% p.a. depending on your credit score, employer profile, job profile, and monthly income. Depending on your repayment capacity, the sanctioned loan amount can go up to Rs. 30 lakh. Some lenders may even offer up to Rs. 40 lakh. In general, the repayment tenure is in the range of 1 to 5 years. A few lenders may offer an even higher term of up to seven years.

  • Credit Option — Loan Against Gold: Loan against gold is another good credit finance option. Because of the recent surge in gold prices, you can get a greater loan amount against the same pre-existing gold quantity. The interest on a gold loan is lesser as compared to other types of loans. Gold loan terms are mostly quite flexible. Also, the repayment terms can be negotiated.
  • Credit Option—Loan Against Credit Card: Credit card companies offer pre-approved loans to existing cardholders. They provide loans to select cardholders with consistent bill repayment history. As the loans are pre-approved, the processing time for loan disbursement is less. The loan disbursal is instant or within a couple of hours after you make the application. The tenure for the loan against a credit card can range from six months to five years.
  • Credit Option—No-cost EMIs: Companies, both online as well as offline offer no-cost EMI options. No-cost EMI is like a regular equated monthly payment option. The only difference is that you do not have to pay the interest along with the principal. In the no-cost EMI option, the interest you need to pay on purchasing a product is offered as an upfront discount at the time of checkout. Even when no-cost EMI benefits you from paying a lump sum amount upfront for a product, you should not forget the hidden cost you would have to pay for availing no-cost EMIs like the processing fee.
  • Credit Option—Loan Against FD: If you have a fixed deposit in your name, you can get an instant loan by pledging that FD in an emergency. FD is one of the best options for meeting immediate financial needs because the margin amount is significantly less in loan against FD. You can get up to 90-95% of the deposit amount as a loan against FD. A bank charges around 2% higher interest rate than the FD rate on these type of loans.
  • Credit Option—Consumer Durable Loan: This credit option is useful for those who do not have credit cards or any other alternative loan option. You can purchase electronic goods, household appliances, etc. with consumer durable loans. The interest rates for such loans vary for different lenders. Many companies have started offering loans on zero-cost EMI in which the merchant subvents the interest component.
  • Credit Option—Top-up home loan: The option to get credit via a top-up home loan is only for existing home loan borrowers. The funds received via top-up home loan has no restriction on its end-usage. The top-up home loan amount depends on the original home loan amount that was sanctioned at the time of taking the loan and the outstanding loan amount. The loan tenure for a top-up home loan is dependent on the remaining tenure of the existing home loan. Some lenders also offer instant top-up home loans.

Get Instant Personal Loan Online on PaySense

Securing personal loans couldn’t get any easier than this! PaySense is the quick and easy online personal loan app. The loan disbursal process is easy and hassle-free. The many benefits of PaySense personal loan app includes instant approvals, quick disbursements, one-time documentation, etc. Get instant personal loan online on PaySense whenever you need one.