What are the best emergency cash loans and which one should you choose?

Sep 07, 2020

Emergency cash loans are borrowed funds that are availed for the purpose of sorting through a crisis or urgent situation. These types of loans are helpful in circumstances like medical emergencies, the break down of important appliances or electronics, or an event that requires you to travel someplace suddenly.

Lenders across different types of financial institutions are willing to offer funds, from banks and NBFCs to pawnbrokers, or even friends and relatives. However, your choice of a lender may vary on the basis of your current financial situation, or even your employment status. So here’s a quick look at the different types of emergency cash loans that are available.

Types of emergency cash loans

Payday loans

This type of loan is a high-risk loan but offers an instant cash guarantee. According to the terms of this kind of loan, the borrower can avail only a small amount of money from the lender. In addition to this, the repayment must be completed in full once the borrower’s next salary is deposited.

Oftentimes lenders request borrowers to provide a postdated check for the date of their next salary. Since this loan is a type of unsecured loan, the interest rates are extremely high, and the loan tenure is always too short. It is typically no longer than a month. These terms may not be favourable for a borrower because while they provide the necessary funds, the conditions can lead to debts.

Bank loans

Banks offer emergency cash loans but have strict policies in place to ensure that they do not face high risks when offering them. These are usually personal loans which are processed much faster at the request of the borrower, and so they require the same number of documents and credit checks.

In addition to this, the borrower must be employed for a minimum period of 2-3 years and must have held their existing job for a minimum of a year. Banks also require a minimum salary, which varies across different institutions. If a borrower is able to check all these boxes, they can quickly become eligible for an instant cash loan.

Gold loans

For those who are between jobs, are students, or are stay at home mothers, payday loans will not be within reach, and bank loans will not be sanctioned. In such circumstances, a gold loan can act as one of the best urgent cash loans for unemployed people. This is because these loans do not have strict eligibility criteria the way other loans do. They are also processed much quicker and are therefore sanctioned instantly, offering immediate funds to borrowers.

All that is required for a gold loan is the right amount of collateral for the desired amount of cash. The documents required for a gold loan are also minimal, with only address and identity proof being the essential papers. The interest rates are also the lowest in the market, and gold loans offer flexible repayment options with high loan amounts. This can make all the difference in an emergency situation as there is no added pressure with difficult loan terms.

Pawnbrokers

Emergency cash loans for unemployed people are also made possible with loans offered by pawnbrokers. These shops can be found with great ease in any neighbourhood, and owners offer instant cash against an asset that is offered as collateral. Most often, the collateral must be in the form of precious jewellery and ornaments.

The downside to these emergency cash loans is that the interest rates are typically extremely high, and the terms and conditions are set by the pawnshop owner themselves. Since they set these terms, the loan tenure also tends to be too short, making it difficult for any individual to complete repayments within the stipulated time. Thus, urgent cash loans for unemployed individuals are possible with pawnbrokers, but carry high risks.

Relatives and friends

Friends and family are often the people we turn to in our times of need. And since they are people invested in our well-being, it can be expected that they will not charge high interest rates, and will offer enough time to pay them back with ease.

These loans also make emergency cash loans for unemployed individuals possible. However, borrowers must be cautious about making a request for urgent cash as these situations can strain relationships quickly. They may also have to disclose the purpose of the funds, which may be a personal matter.

Making the best choice

Applying for a gold loan is probably the safest and easiest option for an emergency cash loan. With some of the lowest interest rates and most flexible loan tenures among different loan options, gold loans prevent the risk of falling into debts easily. These loans can be availed by anyone, even unemployed individuals since no papers apart from KYC documents are required. There is also no need for income proof, employment proof, credit history, or anything else.

The collateral is much easier to obtain as well since gold ornaments are easily available in most households. They also offer great loan amounts with high per gram rates, which guarantees that you will have enough funds to get you through your crisis.

For your emergency cash requirements, choose Rupeek’s gold loan solutions. With unique doorstep services, your loan experience will be simple, convenient, and hassle-free. Rupeek’s partnerships with trusted banks across the country and tech-enabled services also ensure your gold is always safe and secure.