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In need of emergency cash amid coronavirus lockdown? You could try these options


For people facing liquidity related issues, there are certain options which can be explored while putting personal finance in order.

In need of emergency cash amid coronavirus lockdown? You could try these options
The coronavirus crisis and the subsequent lockdown has brought everything to a standstill. Amid this pandemic, many people must be facing income flow disruption. Those who are facing liquidity related issues, there are certain options which could be explored to put personal finance in order.
Here are some of the ways that one can tap as emergency cash:
Advance against EPF or partial withdrawal from National Pension System (NPS)
"The government recently came up with certain rules for withdrawal from EPF and NPS which can be followed to have money in case of cash crunch," says Rachit Chawla, founder and CEO of Finway.
The government has allowed subscribers to make a partial withdrawal, or 'advance' withdrawal, from the EPF corpus due to the coronavirus pandemic. According to the new EPF rule, subscribers can withdraw 75 percent of balance or three months' wages, whichever is lower, as non-refundable advance from their account.
The subscribers of NPS can also partially withdraw funds from their accounts to meet expenses related to treatment of coronavirus. According to the recent order from the government, NPS subscribers can make request for partial withdrawals towards the treatment of the illness for self, legally wedded spouse, children, including a legally adopted child or dependent parent.
COVID-19 specific banks loan
Banks such as Bank of Baroda, Punjab National Bank, Bank of Maharashtra and Bank of India have launched new personal loan schemes. These loans come with relaxed norms for customers. COVID-19 specific loans are primarily offered to existing customers requiring emergency funds to tackle cash flow disruptions.
Premature withdrawal from PPF or loan against PPF
PPF allows partial withdrawal after seventh year with some limitation, which can also be used as an emergency cash.
The PPF account also allows individual to take a loan from the account between third and fifth year.
"The loan amount can be a maximum of 25 percent of the second year immediately preceding the loan application year. A second loan can be taken before the sixth year if the first loan is repaid fully," according to ClearTax.
Top ups on existing loans or loan against mutual funds/fixed deposits
People can also use borrowing options such as top-ups on existing home loan, personal loan or may take a loan against MF/FD, suggests Zafar Imam, Lead- OPPO Kash.
In case of loan against mutual funds, the loan amount largely depends on value of the mutual fund units to be used against the loan. The loan against mutual fund units is done in the form of an overdraft facility and the interest is charged on the amount availed as the credit.
The loan amount, in case of loan against fixed deposit, largely depends on the sum that is lying in the investor's account. It is done in the form of an overdraft facility or as a demand loan.
Redeeming liquid funds
On Investment side, one can also redeem required amount from existing liquid funds such as fixed deposit (FD) and recurring deposit (RD).
Credit line
"People, who do not want to liquidate investments or tap into savings, the best option is to opt for a credit line. A credit line can help them in borrowing flexible amounts to tide over the immediate need for cash. One can choose comfortable tenures to repay EMIs," explains Bala Parthasarathy , CEO and co- founder, MoneyTap.
Pre-approved loans
Pre-approved loans can help in quick processing and disbursal of loan.
"Credit card holders having a good repayment history can also consider pre-approved loans against credit cards. The interest rates of these loans start at as low as 11 percent and tenure can range from 6 months to 5 years," according to Naveen Kukreja, CEO and co-founder, Paisabazaar.
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