A particular person may perhaps face an emergency scenario anytime – be it a health-related emergency, an accident, a all-natural or man-made disaster, job loss or something. So, it is utmost critical to retain an emergency fund by maintaining liquid money in hand or by investing in funds with fantastic liquidity.
As a thumb rule, one really should retain at least six months’ salary or six months’ costs in liquid type as an emergency fund. However, in case of serious illness requiring prolonged hospitalisation or in case of serious loss, such an quantity may perhaps fall brief.
In case a particular person fails to retain an emergency fund or in case the fund falls brief, a particular person may perhaps want to arrange substantial dollars urgently on facing an emergency scenario.
So, it is critical to know how to arrange emergency funds swiftly at a affordable expense.
“There are two important factors in arranging funds at low cost – time and awareness. When you have the time to plan your purchases, you can afford to look up for products, compare prices and find what’s available at a much cheaper rate. Of course, you need to first ensure your emergency fund – either an emergency savings fund or access to a digital line of credit – is in place for all other contingencies in life,” stated Anil Pinapala, CEO & Founder of Vivifi India Finance.
“Secondly, you need to research, be aware about the various options available to you for you to scan, take an informed decision and make the best choice. Look for offers – on credit cards, Fintech, Pay Later, and more. Be careful not to fall prey to unlicensed lenders; or any scheme that is too good to be true. Lastly, a better credit history will mean better loan availability. Therefore, be prompt in repayments,” he added.
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According to Abhishek Soni, CEO & Co-Founder of Upwards, “For the quickest turnaround and lowest cost, friends and family might be an option.”
However, if that alternative does not work out, Soni suggests that you can attempt either of:
– availing a low expense private loan or
– breaking any of your old FDs or
– attempting to get a salary advance from your employer or
– dipping into overall health/life insurance coverage if the emergency fund requirement is for a health-related use case