Medical emergencies are unforeseeable and can happen with anyone at any time. However, due to the rapid rise in health care costs, most people are unable to handle such emergencies and often fail to receive the right medical assistance on time. It is because of this reason that now, many financial institutes and lenders are offering personal loans for medical emergency. Thanks to its unsecured nature, it has become easier for anyone to get a personal loan. Here, in this article, we’ll cover the vital aspects related to a personal loan as well as the advantages it offers over its counterparts.
Factors to Consider Before you Apply for a Personal Loan
- Eligibility Criteria
Every financial institute or lender has its unique eligibility criteria. Therefore, make sure that you go through their eligibility requirement and the terms and conditions page properly before applying for the loan. If you are a salaried professional, getting a personal loan will be a lot easier.
- Documentation
Due to the unsecured nature of the personal loan, the importance of documentation increases all the more. As a result, you need to keep the following documents handy well in advance.
- Aadhar card
- Voter ID
- Driving Licence
- Salary slip
- Bank statement of last three months
- Credit/ CIBIL Score
To get a personal loan, you need to maintain a CIBIL score of more than 750. A reasonably good credit score ensures timely repayment in the eyes of the lender and helps you access a loan during times of medical emergency.
- Fixed Obligation to Income Ratio (FOIR)
In simple words, FOIR is nothing but an income-to-debt ratio and is an essential parameter that financial institutes or lenders use to calculate your loan eligibility. Generally, the borrower should have a fixed obligation to income ratio of less than 50%. Even if you don’t have a decent FOIR, you could still be eligible to avail of a loan; however, you might have to pay a little higher interest rate.
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Advantages of Getting a Personal Loan for Medical Emergency
- No Collateral
Thanks to its unsecured nature, you don’t need collateral to avail a personal loan. The absence of a mortgage in case of an emergency financial requirement is a plus for the borrower. It helps access hassle-free and timely solutions in times of emergency.
- Fast Approval
Using a personal loan mobile application, you can instantly compare and apply for a loan. Besides, you can also upload the necessary documents using the same app and get the loan amount approved within 24 to 48 hours. Such quick approval of the loan is no less than a blessing during an emergency.
- Access to a Higher Loan Amount
In case of a significant health issue, you might need a substantial amount to avail of medical care for it. While most loans offer limited loan amounts, the same is not the case with a personal loan. By taking a personal loan, you can access a considerably large loan amount. The absence of end-usage restriction will allow you to spend the loan capital flexibly.
- Low-Interest Rate
From a borrower’s perspective, a lower interest rate is always an advantage. Though you can get a lower interest rate in most secure loans, having a decent CIBIL score can further reduce your interest amount. Besides, you can compare different loans with the help of a personal loan EMI calculator, and go with the best available deal.
- Flexible Repayment
Personal loans let you enjoy a flexible repayment tenure, which, in turn, can help you to reduce your monthly EMI. However, you need to understand that longer the loan term, the more interest you will have to pay and vice-versa.
Wrapping it up
At the time of a medical emergency, a personal loan can make a difference and be a life savior. However, you need to first consider the points mentioned above before making your final decision.
