Facing a Covid emergency? Here's how you can get funds urgently

Households in India face a higher risk of health emergencies during the second wave of the Covid-19 pandemic. With daily cases and deaths rising sharply, a dedicated health insurance policy has become a necessity, but there is also a need to keep an emergency cash fund ready.

While a health insurance policy will cover treatment costs, insurers' approval for cashless treatment may take some time. In the meantime, the hospital may ask a patient's family to make an upfront cash payment to begin treatment. There are many other situations where a patient may need to make cash payment for treatment. For instance, if the sum covered by the insurance policy is less than the actual cost of treatment or if treatment is availed at a non-network hospital.

Right time to make use of credit card

Though it is not ideal to swipe credit cards due to exorbitant interest rates, it is one of the fastest ways to make payments at hospitals during health emergencies. You can reduce the interest cost later by converting the total amount to EMI or by taking a low-interest loan to clear the credit card debt.

Instant personal loans

Most banks offer a pre-approved loan to existing customers. Such loans can get instant approval unlike those which require elaborate documentation. In case you are in need of urgent funds, you can approach your nearest bank branch and find out whether you are eligible for an instant personal loan. The interest rate will depend on your credit score and the bank's offering. In case you have an ongoing personal loan, you can apply for an instant top-up on the existing amount.

Gold loan

Another way to receive quick funds during an emergency is by pledging gold. Gold loans have quick disbursement time, and you can get the funds in just a few hours after submission of the application. These loans are ideal for people who are in urgent need of funds but have a poor credit score. Since the gold acts as collateral, lenders can lend to all individuals at a nominal interest rate. The interest rate depends on the quality of the gold and the customer's repayment ability. The rate is usually higher if the repayment ability is low.

Loan against insurance policies, mutual funds and more

In case of a health emergency, you can also opt for loans against insurance policies, mutual funds, shares or fixed deposits. It may be noted that the interest rate on such loans is lower than personal loans. While 100 per cent of the value is not given, individuals can expect at least 60 per cent of the surrender value.

Employees Provident Fund (EPF)

Another way you can get urgent funds is by withdrawing from Employees Provident Fund (EPF). However, this money should only be withdrawn as a last resort if the above options do not apply to you. However, the disbursal time could be longer than all the above options.