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Personal loans: Though it falls into the category of personal loan, the interest rate on loans for Covid-19 treatment is far lower
Nothing has shaped the domain of personal finance in the country as the Covid-19 pandemic. Millions have not only lost jobs and suffered wage cuts, but are also facing sudden and astronomical treatment bills.
To help citizens tide over this crisis Reserve Bank of India had created a liquidity pool of Rs 50,000 crore in early May following which a few banks have started offering loans up to Rs 5 lakh for treatment.
These banks are State Bank of India (SBI), Punjab National Bank (PNB), Bank of India (BOI), and Union Bank of India (UBI).
Eligibility
The eligibility criteria for Covid-19 personal loan vary with each bank. For instance, SBI’s Covid-19 personal loan is for salaried as well as non-salaried customers along with pensioners and their family members who have been found Covid-19 positive on or after April 1, 2021.
On the other hand, Bank of India (BoI) offers its Covid-19 personal loan for customers having a salary account with them. Also eligible are all existing housing loan customers and all existing standard personal loan customers.
Regular pensioners and family pensioners are also eligible for this loan from BOI.
Interest rate
The interest rate of Covid-19 personal loans is lower than a regular personal loan. The interest rates range between 6.85% and 8.5%.
On the other hand, the cheapest regular personal loan is available at an interest rate of 8.90%. It goes above 10% in a few banks.
Bank of India (BoI) is offering Covid-19 personal loan at an interest rate of 6.85%.
On the other hand, the interest rate of both SBI Kavach Personal Loan and PNB Sahyog PIN Covid-19 is 8.50%.
The rate of interest on Union Covid-19 Personal Loan Scheme is 7.20%. It is related to EBLR (floating) with monthly rests.
Loan amount
Covid-19 personal loan amounts vary with each bank. One can approach SBI, BoI and UBI for a loan between Rs 25,000 and Rs 5 lakh as per eligibility.
But the ceiling for Covid-19 related personal loan in PNB is Rs 3 lakh.
Charges
Processing fee, margin requirements and other charges on Covid-19 loans are either nil or low. SBI, BOI, PNB and UBI have zero processing fee and nil margin requirements, while Bank of Baroda charges a low processing fee.