Public sector banks are offering personal loans up to Rs 5 lakh that individuals can use for the COVID-19 treatment of self or family members.
India's largest lender State Bank of India (SBI) offers loans at an interest rate of 8.5 percent. The minimum loan amount is Rs 25,000, and the maximum tenure will be five years, according to Dinesh Khara, State Bank of India Chairman.
According to Union Bank of India's website, the interest rate will be 8.5 percent on such loans and the maximum tenure will be five years.
Canara Bank offers a similar Suraksha personal loan with the minimum and maximum amount of Rs 25,000 and Rs lakh, respectively. The Canara Suraksha scheme will also provide a six-month moratorium.
Due to coronavirus pandemic and cash crunch, public sector banks had launched COVID-19 personal loans last year. Those loans were also available for existing customers and were priced aggressively – some as low as 7.2 percent.
If you are facing a temporary cash-flow problem, then only opt for personal loan for treatment of the COVID-19, which is available at cheaper rates. You can avoid them if there's uncertainty about cash-flows. It's best to avoid liabilities in the current environment. Instead of taking a new liability, it's better to liquidate an asset.
-Customers who are drawing salaries or pension through the bank for the past 12 months.
-Those who have taken a retail loan (home, vehicle, mortgage, personal and cash loan) from the bank.
-Non-salaried individuals who maintain a savings or current account with the bank and have been regularly filing income tax returns.
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