7 Quick Loan Options for Medical Emergency

A financially established young generation does tend to spend a substantial share of their earnings on their day-to-day and monthly expenditures. However, a major slice of their income is diverted towards savings and long and short-term investments.

While that is what most educated young men and women aim to get done as soon as they are on the career paths, this may lead to a situation where they may have limited access to instant cash during a medical emergency. Under such circumstances, they may be compelled to opt for financing through various types of loans to cater to their need for immediate funding.

Not sure which loan options are available in case you need funding for a medical emergency? Let’s find out.

1. Personal Loans

Conventionally, personal loans are generally associated when individuals require short-term financial assistance in tiding over monetary requirements, such as purchasing a high-value item or a home renovation. However, one of the most significant roles of a personal loan is financing medical expenses. Use the Personal Loan Eligibility Calculator, a free-of-cost tool available on the SMFG India Credit website to check if you qualify for one.

A personal loan is a short-term, unsecured loan that can be obtained without pledging any asset of the borrower to the lending partner. Moreover, a personal loan for a medical emergency can be used for surgery, to conduct therapy, or to meet the expenses for dental procedures, cosmetic surgery, accidents and expenditures for long-term and critical illnesses, and much more. These loans are especially helpful for those who have run out of their insurance cover or need funding for procedures not covered by insurance.

2. Covid-19 Personal Loan

The Covid-19 personal loan is a special type of personal loan being offered by several banks and financial institutions during the pandemic. Individuals who are infected with the virus and have rammed up a significant bill on treatment can apply for this type of personal loan. You can use the Personal Loan EMI Calculator available on the SMFG India Credit website to get an accurate estimate on your monthly installment amount on the special Covid-19 personal loan.

That said, this special loan is only being offered by a select few lenders. Therefore, if your lender does not offer this option, you can always opt for a traditional personal loan option for a medical emergency to meet your needs for instant cash. Please also keep in mind that lenders may only sanction the loan if you satisfy the required personal loan eligibility criteria.

Must Read: Here's How a Personal Loan can be useful for Emergency Funding!

3. Gold Loan

If you have access to gold in the form of jewelry or coins, you can apply for a gold loan instead. The rate of interest is at par with or sometimes even less than the personal loan interest rates. Most nationalized and private banks along with a few non-banking financial instructions offer gold loans. Gold loans come with little or no eligibility requirements and are instantly disabused to the borrower as the gold is taken as security by the lender.

Depending on the lending partner, the repayment tenure can vary anywhere between 12 months to 3 years.

4. Loan Against Securities

In the event of a sudden medical emergency, your only way out may be a loan. While the natural instinct would be to apply for a personal loan, you may not always qualify for one. The next best thing will be to get a loan against securities that enables you to instantly monetize your securities without having to prematurely sell them out to the insurance provider.

Other than whole life insurances, you have the option to pledge many more financial instruments including stocks, shares, mutual funds, bonds, etc. that is acceptable as a form of security when you apply for a loan against securities at SMFG India Credit. 

5. Loan Against Property

A loan against property is a popular financial product when you need to raise funds for a medical emergency. Lending partners like SMFG India Credit will finance a specific percentage of the current market valuation of the pledged property as the loan amount.

The loan against property is approved when the applicant submits all the necessary paperwork relating to the fixed asset such as a plot of land or even a commercial or residential property as collateral or security. Please note that, unlike unsecured loans, a loan against property may take at least 2-3 weeks before you get approval, depending on your eligibility and availability of required documents.

6. Home Loan Top Up

If you have an existing home loan, you can avail of a top up on the same loan if you are in need of instant cash for a medical emergency. With an active home loan account, most lenders approve these top up loan requests immediately following a speedy disbursal of the amount to your bank account. Please note that home loan top-ups completely depend on the lender’s policies, as well as your history of repayment and your eligibility.

Compared to personal loan interest rates that can range anywhere from 13% per annum onwards, the rate of interest on your top up home loan may be more economical in the long run, if you need the amount to supplement your home such as restoration, renovation, and so on. Else, the normal policies of the lender will apply, if you just need an unsecured loan amount.

7. Overdraft

While a personal loan option for a medical emergency may be the quickest option, you may be eligible to apply for one. Under such circumstances, you can try for an overdraft if you have a current account in your bank.

The overdraft is a withdrawal arrangement between the individual and the lender. Here, the borrower is able to withdraw a greater amount than the available balance from the current account up to a specified limit. Unlike the list of personal loan documents required with the application, the overdraft can be availed without the need for submission of any additional paperwork from the borrower.

Must Read: 5 Simple Ways to Choose the Right Personal Loan Tenure

Final Thoughts

Of all the loan options available for a medical emergency, no doubt, the personal loan is the most popular and convenient financing route. That said, availing any of these avenues of funding ensures that you are not forced to chip into your savings or retrieve any investments prior to their maturity period. In a way it makes life easier for the borrower as funding via all of these routes takes care of the financial worries for medical emergencies without coming in the way of their financial planning.