Finance a medical emergency with care

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The importance of building an emergency corpus has been reiterated several times, especially after the coronavirus-induced disruptions last year. The second wave of Covis-19 has wreaked havoc in the country. People who already had an emergency fund set aside, are better off. But. what if you don’t have enough funds for unforeseen medical emergencies?

You can claim health insurance to obtain the services that are covered in your policy. For the availed medical services, you can either get reimbursement or direct settlement, depending upon the nature of your policy. In case of emergency hospitalisation, the family of the insured must contact the insurance provider after hospitalisation.

But sometimes, your insurer may take a long time to settle the bills or might not pay for a few services that are not provided in your policy.

So, what should you do in such a scenario?

“People can apply for personal loans. There are a lot of fintech companies that are offering loans at reasonable rates of interest. I suggest reading the documents carefully and then apply for the loans. Secondly, there are a lot of peer-to-peer companies which have got famous in terms of raising money wherein the other person only of the social score will give or lend the money,” said Rachit Chawla, CEO and founder, Finway FSC.

Credit score

If your credit score is good, many banks give personal loan offers to the account holders. Check if you have any such pre-approved loans. You can instantly avail such loans online. “A Pre-approved personal loan is a decent option one should opt or go for,” says Chawla.

Can credit cards also be used at the time of emergency?

Chawla says people should avoid this option.

“Credit cards are the most expensive option, I never recommend this to anybody. Credit cards should be used as assets as in they should be used but definitely be paid before the due date so that not even a single penny goes out of the consumer’s pocket,” he said.

Other options

A loan against gold is also one of the immediate methods to arrange funds. Apart from banks, many non-banking financial institutions also provide this service. “Loan against gold is a good option for people who don’t have a good credit score or good credit history. Since gold loans are pre-approved because they value the gold and then give you the money,”

Chwala feels loan against FD is also a safe option but does not see it making calculation sense because ‘FDs generally give a low rate of interest as compared to the kind of rate of interest you have to pay on the loan”.