Emergency never comes by telling and often money is required in such difficult times. Medical emergency, sudden vehicle repair or renovation of the house, immediate money is required to deal with such situations. The good thing is that in today’s time there are many ways to arrange immediate money.
Ways to arrange emergency funds
1) Personal Loan
When a sudden expense comes, a personal loan is very useful at such a time. This is a fast and easy way to borrow money. Due to a large number of digital loan platforms, you can get personal loans within minutes to a few hours. As an example,
Through the Moneycontrol app and website, you can check personal loan offers of up to Rs 50 lakh from 8 lenders. You can get an emergency loan without any paperwork and minor processing charge. The interest rates here start at 10.5% annually. Just fill your information, complete your KYC and set the EMI repayment schedule to get money in your bank account.
2) Borrow from friends or family
Usually borrowing from friends or family members during emergency is the fastest way to get money. One, usually this option is interest free and second people close to you are well aware of your situation. The repayment should always be transparent about the term. Later, to avoid any dispute, let us clearly tell you how long you will be able to repay the loan.
3) Credit Card
Credit cards can prove to be helpful in covering emergency expenses, such as medical bills or an urgent car repair. It is important to be cautious about your credit limit and credit utilization ratio. Try to keep your credit utilization less than 30% – 50%.
4) Advance Cash
You can also think of taking advance cash on your credit card. This allows you to withdraw cash to a limit, but remember that most credit cards charge fees for advance cash. Apart from this, interest is usually taken from the date of withdrawal, so to avoid high interest rates, advance cash should be repaid as soon as possible.
Being prepared for an emergency premature time is one of the best ways to deal with such difficult times. When suddenly a necessary expense comes out, at such a time the Emergency Fund works as a safety net. Therefore, according to your expenditure of one month, the expenditure of three to six months should be prepared as an emergency fund. If you do a regular contribution in this fund, then you can deal with any emergency situation without using a credit card or loan.
6) EPF Advance
Emergency Provident Fund (EPF) Advance in Emergency can be a good option for an employee working on salary. EPF allows you to extract a part of your savings for certain special tasks like medical expenses, marriage or home repair. You can contact your company or Employees Provident Fund Organization (EPFO) for more information about how to access these funds.
7) Loan on property
If you have a property, then taking a loan in exchange for property in emergency can be a great option. This is a secured loan, so its interest rates are lower than unsecured loans.
8) Overdraft facility
Overdraft facility is a credit facility that allows you to withdraw more money from the amount deposited in your bank account, but it has a fixed limit. Nowadays almost all banks and NBFCs are offering overdraft facilities. You can use this facility for any emergency and interest here will be charged only on the withdrawn amount instead of the entire overdraft limit. It is important to keep in mind that banks can make changes in one time fee and insignificance funds for overdraft facility. Interest is usually calculated every day and the bill is sent at the end of the month.
Importance of preparing emergency fund
You can arrange money in emergency through the methods mentioned so far, but the best way is to keep the emergency fund ready. This fund gives you financial security, so that you do not need to depend on loan or credit card when difficult time comes.
If you have not yet created an emergency fund, you can start in this way:
- Start small: If there is not much salary, then start with small saving, which you can easily manage. Investment through SIP in mutual funds can be a better way to make your emergency fund.
- Separate account: Keep your emergency fund in a separate sending account, so that it is easy to track and for the expenses that are not necessary, you can avoid using this money.
- Automat your savings: Set automatic transfer to your emergency fund and SIP from your main account every month, so that you do not have to manually make it manually.
- Think about taking insurance: Due to health and life insurance, you will remain financially secure in emergency situation.
- Emergency Fill the fund again: If you have used emergency funds, then start making emergency funds as soon as possible to maintain the financial safety net.
conclusion
Lack of money in difficult times can cause trouble for anyone. Therefore, it is necessary to have an option for immediate access to money. An emergency fund is the best way to make an emergency fund to be prepared in advance for any situation. You can also start with small savings. Through regular saving, you can make a good emergency fund, which will work as a safety net for you in any difficult time.
If you are looking for a quick emergency loan, then check the moneycontrol app and website for funds up to Rs 50 lakh. Its interest rates are low, which starts at 10.5% annually and the entire process is online.
Summary
Sudden expenses can create difficult situation for you. At such a time, find quick and reliable ways to raise emergency funds.
Top banks/ NBFCs
50 lakhs
Get instant loan up to
Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.