In India, there are a range of urgent loans that are provided to the individuals facing some financial crisis. It is very convenient to get quick access to funds with an affordable rate of interest. Unfortunately, due to lack of financial knowledge many people are not aware of the many options they must secure immediate financial help. In this article, we will discuss some urgent loans to get relief amid a crisis.

Which Urgent loan should you get?

There are many factors on which deciding which loan you should get depends. The factors include how fast you are getting the money and at what rate of interest and for how long.

Types of Urgent Loans:

Personal Loans

A Personal loan is an unsecured loan provided by banks or online lenders to individuals in need of urgent loans. In secured loans the money is fixed to an asset that is used as a collateral but in unsecured loans your money is not fixed to an asset such as a house or car. If you fail to repay on the decided time then it will impact your credit score. These loans are meant to be repaid in fixed monthly instalments over a predetermined period.

Payday Loans

Payday Loans is an instant loan that gives you access to the funds you have applied for on the same day. These loans have a short repayment period. These short-term urgent loans range from two weeks to a month. Despite the quick access feature these can be risky because of the very high rate of interest that is charged to the individual. And due to their high costs and short repayment terms, payday loans can trap borrowers in a cycle of debt.

Gold loans

Gold loans are the secured loans that are also known as loans against gold. The loan amount sanctioned to you by lenders is generally a certain percentage of the gold’s value. There is no end to the use of gold loans like other loans. It has no eligibility criteria, if you have gold then you can get an urgent loan. You do not even need to have a good credit score to be eligible for a gold loan. Gold loans have a fixed repayment period, typically ranging from a few months to a few years, depending on the lender and the loan amount.

Salary Loans

In India, Salary Loans are also known as Pay check advances. These loans are designed in such a way so that the employees can get quick access to a portion of their upcoming salary prior to the scheduled payday. These are short term loans for the individual in the need of urgent loans. Many companies in India offer salary advance programs. This loan has a limitation that only a limited percentage to their total salary can be requested for.

Microfinance Loans

In microfinance loans, financial services are provided to low-income individuals or small business owners in the underdeveloped part of India. These loans are typically offered by microfinance institutions (MFIs), non-governmental organizations (NGOs), or specialized banks known as microfinance institutions (MFIs) or self-help groups (SHGs).

These loans are easy to access as it has a quite simplified application process as compared to the traditional bank loans. Also, borrowers may not be required to provide collateral. Rate of Interest on microfinance loans in India are generally higher than those of traditional bank loans.

Bottom Line

It is always advisable by most experts to save 3 to 6 months of expenses to avoid any financial emergencies. Keeping your credit in tip-top shape can help you get the lowest rates at the best terms if you end up needing a loan in an urgent situation.