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Steps to take if you can't make ends meet because of the pandemic
20 July 2020
The Covid19 pandemic has led to major disruptions across industries resulting in millions of job losses and salary cuts across the world. Unfortunately, if you have been watching the news for a while, it is safe to deduce that the overall downturn in the economic situation is here to stay for a while before normalcy is restored. Hence, at an individual level, a conservative approach towards finances is the way forward regardless of your situation. The immediate concern being steering our family towards financial stability.
So, for those of you who are struggling to find a way forward in this chaos, here are a few recommendations that could start you off on your roadmap to recovery.
1. Credit Card & Personal Loans – Quick & Easy!
This one is probably your safest bet! There are already pre-approved digital loans available now to help tide over the pandemic crisis. These loans are disbursed within a few hours of application, with the shortest processing time possible. The loan process itself also does not require any physical contact (completely digital). Most importantly though the credit source is also a 100% reliable to tide over liquidity issues with loan repayment being managed through convenient EMIs with flexible repayment tenures to choose from.
The same also holds true for a personal loan. All you need to do is check the rate of interest for loan repayment in each case before making a choice.
2. Gold Loan – Safe with Banks!
With many of us feeling uncertain about our financial stability, going for a safe choice like a gold loan is a great option in India. However, remember that the interest rates can be different in each bank, so check with as many banks as possible to decide where you’d like to avail your loan. Once you have selected a credible bank with a good history, it's the same as any loan, and you just need to follow the due process and paperwork.
Are you worried about the safety aspect? Don't be as the bank lockers are safe and all your jewellery gets weighed in your presence and noted in the documentation. A copy of this document will also be placed in your custody. The jewellery is then finally sealed into a container in your presence and shall only be opened again in your presence after you repay the loan.
Note: Keep all your documents safe as you would need to produce them when you complete repayment.
3. Emergency Budget – Your Safety Net!
Having a sizeable amount that can take care of your family financially for six months to approximately an year is always a great idea at any stage of life. No matter what happens, do not be tempted into taking risks in the hope of high returns as this is an exceptionally high volatile period. Instead of hoping for a big return, keep a large part of the loan availed or your own savings for monthly expenses to ease your worries.
4. Avail Government Schemes:
The government has also stepped in with numerous schemes to accommodate the issues cropping up due to the slump in the economy. Here are a few that you can choose to avail-
Working capital loan helps to procure funds for the day-to-day expenses and management of a business such as utility bills, debt and inventory management, salaries of employees and other operating costs.
Mudra loan is finances for non-corporate, non-farm micro establishments.
PSB Loan in 59 Minutes – this is an online marketplace enabling business individuals to apply for business loans at a rate of interest of 8.50% onwards.
Pradhan Mantri Rozgar Yojana (PMRY) – To start and establish micro enterprises and business ventures over a period of 6 months to 2 years.
The eligibility criteria are different for these loans but usually require you to submit your age, loan amount required, the type of business you require loan for, credit limit, your present annual turnover and capital invested along with essential documents. This process again can be completed online by simply scanning your documents and uploading a clear copy online.
While we understand that this situation can overwhelm the best of us, it is important to take a breather and evaluate your priorities now. Apart from these options, you can also talk to people in your industry or friends/family to take tips on how they are staying afloat. After all, this "new normal" requires adaptation, and that can only be done if one is willing to learn.
Lastly, we wish you the very best and hope you are all able to come out stronger from this.