How an emergency loan can help manage your finance better?

An emergency, from medical to house repair can crop up anytime and we cannot predict the need for instant funds to tackle such situations. Amidst this, personal loans as emergency loans can help meet your urgent financial needs.

Let's look at some key benefits of personal loans

• They are instantly available, making them very apt as emergency loans​​

• You don't have to pledge any security as the loan is collateral-free. It is an ideal solution if you don't own assets or don't want to mortgage them

• The loan amount is optimal, and you get flexible repayment tenures

According to a survey, individual loans grew 46% between 2021 and 2022. About 67% of the survey's participants mentioned taking a personal loan for their immediate financial needs. Another set of data indicates that 77% of working professionals in India take emergency loans to meet their requirements.

If you are a working professional looking for instant funds to address an urgent situation or plan your near future better, you must know the benefits of a personal loan and situations where you can make use of it.

Benefits of emergency loans for working professionals

1. Emergency funds

Think 'instant funds' and personal loans would be first in your mind. These are sanctioned quickly because they -

• are collateral-free

• have simple eligibility parameters, and

• involve minimal documentation

Several banks and Non-Banking Financial Companies (NBFCs) offer personal loans at varied interest rates, making them easily available. They can be extremely handy in a medical emergency or any other urgent requirement. 

2. Home improvement or renovation

Upgrading your home's interior or making required renovations and fixes can be expensive. A personal/emergency loan helps with quick funding. You can get a high-value loan and renovate or repair your home as needed. This loan allows you to -

• execute a complete renovation project hassle-free

• add an extension to your existing home

• refurbish your interiors

• upgrade your home appliances, etc.

Whatever you need, personal or emergency loans offer no-questions-asked financing. 

3. Debt consolidation

This means merging multiple debts into one individual loan for easier servicing. If you have multiple credit cards whose dues are outstanding or other existing loans, you can consolidate them. 

An emergency loan can help in this situation where using the individual loan to repay the other high-interest liabilities is a viable solution. It will –

• make repayments easier

• save the high-interest costs of other loans, and

• minimise the chances of defaulting

IDFC FIRST Bank Personal Loans start from 10.49% interest rates and also allow debt consolidation. You can seamlessly transfer your existing credit card and personal loan balances and save on interest. Tenures range from 6-60 months for easy repayments.

Also read - Follow these rules while repaying your Personal Loan

4. Higher education for career advancement

In today's competitive world, upskilling is important to advance your career. You might be considering executive courses or undertaking higher education to give your career trajectory a boost. But there are cost implications to pursuing these further studies. Executive courses, post-graduate diplomas, full-fledged post-graduate degrees, Ph. Ds, etc., have varying costs, depending on the geography and institute you choose, ranging from a few lakhs to crores. 

Rather than putting a dent in your savings, you can opt for a high-value personal or emergency loan that has -

• affordable interest rates

• easy repayment tenures, and

• affordable EMIs

For insurance, IDFC FIRST Bank Personal Loans offer loans up to Rs 1 crore at interest starting from 10.75%, making your choice to pursue higher education easy.

5. Business expenses

Entrepreneurs and professionals may require emergency funds to streamline business expenses. Emergency loans can be used to fund business expenses when needed and may include -

• buying a new office

• hiring labour

• meeting working capital needs

• managing business expenses, etc.

A personal or emergency loan can fund these expenses easily, making it a versatile solution for both personal and commercial uses.

6. Wedding expenses

Weddings are usually a once-in-a-lifetime affair. Many couples want a grand celebration to mark their special day and so emergency funds could be used for -

• trousseau shopping

• catering

• venue bookings 

• buying gifts, etc.

7. Travel or vacation

Taking a vacation is important; it helps you relax and take a break from work or the daily grind. But it can be expensive. You can use an emergency loan to fund your trip (domestic or international) without eating into your savings. It can be used to take care of -

• ticket bookings

• hotel accommodation

• sightseeing

• food and miscellaneous expenses, etc.

With flexible repayment plans and manageable interest rates, you can plan your vacation anytime, anywhere, with an emergency loan. 

7. Upgrading gadgets or appliances

Emergency loans can be a great solution when you want to upgrade your personal technology or want new appliances for your home. You can take a personal loan and buy -

• mobiles

• tablets

• laptops

• VR headsets

• refrigerators

• microwaves

• air conditioners, etc.

Also read - Personal Loan without ITR: all you need to know

​​Summing up

Today, emergency loans are available to fund every unexpected expenditure without hampering your savings. With several banks offering personal/emergency loans at varied interest rates, the choice ultimately boils down to you.

With IDFC FIRST Bank Personal Loan, you can get a good deal and a cost-effective individual loan. To reiterate, personal loan benefits from IDFC FIRST Bank include -

• Quick loans up to Rs 1 crore 

• Flexible repayment tenure of up to 84 months

• Interest from 10.49% per annum

• Paperless online application and sanction process

• Collateral-free loans

• Optional insurance coverage to secure loan repayment

With easy-to-access emergency loans, you can fulfil all your dreams and aspirations or create an emergency fund for the next big project. It's one loan with multiple benefits. Apply for yours today.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.