- We have faced curfews in the past, but a business loss and closure for over two months, is happening for the first time, which no one would have ever expected.
- It is obvious that everyone is affected by the nationwide lockdown- either be employees or employers.
- It is a tough time especially for those who have borrowed money from various sources.
- People have active loans for which they are paying regular EMIs, and now are facing temporary cash crunch.
- The pain is of course deeper for non-salaried people who do not have regular income. The salary class is also facing pay cuts and unemployment.
- Banks and NBFCs are now offering COVID-19 personal loans, but one should think whether the same is available to everybody and whether they can be taken for business purposes.
- COVID 19 Personal Loans as it suggests are not business loans but they are personal loans, with some relaxed norms.
- The biggest relaxation is in the form of a lower rate of interest and the Rate of interest ranges between 7% to 10% which is naturally lower than the normal rate of interest.
- Banks have laid out conditions on who would be eligible for this loan product. For instance, Bank of Maharashtra offers it only to its existing housing loan customers. If you are a salaried person, the loan amount allowed will be 10 times your latest gross monthly salary.
- In case you are self-employed, then you will get a loan of up to 60 per cent of your latest annual income based on the latest tax filings. The maximum loan amount is capped at Rs 3 lakh for both salaried and self-employed home loan customers.
Following is the details of personal loan details offered by various banks/institutions.
Should you opt for it?
- A personal loan should be your last resort. If you are in a tight financial situation, first try and tap your emergency corpus if you have one. If you don’t, then liquidate your existing investments or even your gold holdings.
- Do not opt for these loans just because they are easily available online and carry low interest rates compared to regular personal loan schemes.
- Taking on an additional loan to pay off your existing loan can lead to a financial disaster, especially in these times of salary and job cuts.
- Experts advice that at this juncture, be frugal and control your expenses. No one knows how long this contagion is going to last and what shape it will take.
- Only if it’s a dire emergency should you opt for this loan.