In the current Covid-19 crisis the world economy is facing the problem of uncertainty, And Indian Economy is not an exception for that. We are living in unprecedented times where curfews might have been witnessed by many people but the closure of business for more than 50 days is something everyone must be witnessing for the first time in their lives.
Everyone is affected by the nationwide lockdown—employees or employers. This causing the fear of Job and Income loss as most of the businesses are temporarily shut down. In this situation, money lenders are bit cautious while issuing new loans. This means only a selective segment of people can get loans through banks and financial institutions. But if you are in urgent need, here are some loan options that you should consider.
Loan against property (LAP)
This type of loan is authorised against the assurance of commercial, residential and industrial property. Interest rate starts from 8.95% it can vary on the loan amount and credit profile of the applicant and the lender. Loan Tenure period can go up till 20 years. Loan amounts depend on the price of property and payback ability of the borrower.
In gold loan, the borrower can meet their fund requirements by monetizing the gold jewellery. Most of the lenders give gold loans within a few hours of the loan application. The loan amount can go up to 75% of the gold value determined by the lender. The interest rate starts from 9.10% and can vary lender to lender.
Digital top-up home loans
The people having existing loans can go for digital top-up home loans. These loans to do not come with any end usage restriction of loan proceeds. Mostly interest rates are lower than other loan alternatives available to an existing home loan borrower. Top-up home loans also offer longer tenure depending on the residual loan tenure of the existing borrower.
Loan against credit card
Credit card issuers give pre-approved loans on the basis of repayments, spends and card type to their existing cardholders. The credit limit will reduce by the loan amount, once a cardholder avails the loan. Some lenders also offer loan against credit cards over and above the sanctioned credit limit.
Covid-19 personal loans
COVID-specific personal loans are offered by some banks. These loans are to help their existing customers having salary accounts in a bank or existing home loan or personal loan borrowers from the bank and who has best repayment history. These loans come with lower interest rates than regular personal loans as well as these loans do not involve any processing fee. Generally, Covid-19 personal loans have tenures of up to three years. However, some banks are offering tenures of up to five years. Banks are also providing a moratorium of up to three to six months on these loans. However, borrowers need to pay the interest cost of the loan during the moratorium period.
Pre-approved personal loans
Most banks offer pre-approved personal loans to those who have their salary account with the bank or have had a long relationship with it. Since the bank is aware of the customers’ income, spends, EMI commitments, savings, employer etc., these loans are disbursed very quickly and are without any collateral requirements.
The loan amount one is eligible for and the interest rate offered depends on the individual’s income, employer, job stability, current debt, credit history, repayment capacity, etc., though it usually ranges from Rs 50,000 to Rs 20 lakh. Some lenders also claim to sanction higher loan amounts of up to Rs 40 lakh.
List of Banks Providing COVID-19 Loans in India
Bank of Maharashtra
Punjab National Bank (PNB)
Indian Overseas Bank (IOB)
Bank of Baroda (BoB)
Union Bank of India
State Bank of India (SBI)
Bank of India