A financial crisis can strike at any time. The COVID-19 issue, for example, has affected the financial well-being of the global working-class, particularly those without financial assistance or contingency funds to fall back on at such times.
In such cases, a short-term loan is the only viable choice. However, experts advise being cautious and weighing one’s choices before deciding on the best approach to go.
Here are some resources to assist you in the event of a financial emergency:
Line of Credit
This form of credit, also known as a line of credit or credit line, is an unsecured loan that is excellent for those who want minor financial assistance monthly. This is especially important for people who want a short-term loan to deal with an emergency. For an emergency financial crisis, several Fintech companies currently provide such short-term modest credit limitations.
A credit line allows you to borrow money quickly when you need it and then repay it for a nominal charge. According to industry experts, timely repayments and good payback behavior may enhance the borrower’s credit access and credit ratings.
Depending on the loan provider, a borrower can borrow any amount up to their authorized credit limit and then repay it in whole or in installments when the borrower has funds available. The borrower is only required to pay interest or fees for the period he or she has access to the credit line.
Applying for a Personal Loan
A personal loan, like a credit line, is an unsecured loan. The distinction is that personal loans are often for a longer period, whereas fixed-term loans are given for a specified reason. Personal loans have been chosen for larger loan amounts that may be repaid over 1 to 5 years or 12 to 60 months. A personal loan comes with a higher interest rate as well.
Credit card cash advance or loan
In the event of an emergency, one can quickly request an immediate loan against his or her credit card. Having said that, experts warn all borrowers that credit cards are one of the most costly types of borrowing accessible. Credit cards often impose a variety of costs, including cash advance fees, interest, and additional penalties for any outstanding credit. Although the loan is easily accessible through a credit card, just 4% of the Indian population has access to them.