A potential third wave of the COVID-19 pandemic, and particularly its impact on children are being widely discussed among experts and health authorities. While authorities are working on plans to handle future coronavirus waves, individuals on their own should also work on an emergency plan covering financial and health emergencies emanating out of any potential fallout of the third wave.
Here are the key things one can prepare to deal with emergencies emanating out of the third wave of coronavirus pandemic:
Prepare an emergency fund
The first and foremost thing required for dealing with any unforeseen financial emergency is to maintain an adequate emergency fund.
"Ideally, it should be large enough to meet unavoidable expenses like children’s tuition fee, daily living expenses, rent, insurance premiums, EMIs, etc for at least 6 months," said Gaurav Aggarwal - Director and Head of Unsecured Loans, Paisabazaar.com.
Purchase health insurance
Aggarwal further thinks that individuals should have adequate health insurance cover to deal with unforeseen medical emergencies. An adequate health cover will reduce the risk of any medical emergency eroding one’s lifelong investments and savings.
Enhance credit eligibility
As financial emergencies can also lead to availing of loan facilities to deal with cash flow or income disruptions, Aggarwal advises one to take steps to enhance one’s credit eligibility and accessibility.
According to Aggarwal, regular review of credit score and observing healthy credit habits like repaying EMIs or credit card bills by their due dates, avoiding multiple loans or credit card inquiries within a short span and keeping credit utilisation ratio within 30 percent will help one in improving or maintaining credit score and thereby, improve their loan eligibility.
Those who have not availed loans yet, Aggarwal further tells, can steadily build their credit score by availing a credit card and ensuring timely bill payment. Those unable to avail of regular credit cards can avail of secured credit cards to build their credit score.
Increase credit limit
Those already having credit cards should also aim at steadily enhancing their credit limit.
As per Aggarwal, credit card issuers offer pre-approved instant credit card loans to select cardholders having satisfactory repayment history against the credit limit sanctioned to them. Hence, a higher credit limit will increase the possibility of availing of higher loan amounts through credit card loans.
While banks usually charge higher interest rates for credit card loans than personal loans or various secured loan options, Aggarwal believes that an instant credit facility like credit card loans can prove useful for situations where the possibility of availing alternative loan options becomes very low.
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(Edited by: By Ajay Vaishnav)
First Published: IST