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How Has Covid-19 Affected Personal Loan Applications In India?

Sep 17, 2020 15 min read

How Has Covid-19 Affected Personal Loan Applications In India?

The COVID-19 pandemic has rocked every side of normal life. The issues concerning health and life have enormously increased with precautions like masks and social distancing turning into a new norm. Aside from mental stress, the crisis has created economic turmoil for everybody in general. The jolts in the regular income are felt by everyone, whether or not you're a business owner, a salaried employee, or a freelancer. Where the income flow is facing fluctuations, the expenses stay steady if not increasing. This has prompted multiple public-sector financial establishments to come back up with special COVID-19 personal loans. Here is everything you would like to understand relating to the loans offered:

  • The Aim Behind the Loan:

The lenders are providing COVID-19 personal loans to assist their customers in procuring fast loans with relaxed conditions. The loan will help the procurers in mitigating any money crunch they're presently facing. This comes as a ray of hope since regular payment cuts and a decline in business are on the increase since the onset of the pandemic.

  • Eligibility of COVID-19 Loans:

Prominent and established financial establishments with vital clientele have introduced the COVID 19 personal loan. If you have got an existing product with these institutions, then you're eligible to obtain the loan. Under this scheme, the loans are being offered to the prevailing customers only. Also, if you have a loan history from the lender, particularly a home loan, then you can also avail of the loan offered. Here, the catch is to own a satisfactory credit score and a decent repayment record.

  • Loan amount and Tenure:

The range of the loan amount tends to dissent based on the financial organization in consideration. Also, your profession and former interaction with credit have an effect on the loan amount offered to you. In general, the loans are being offered in an exceedingly range from Rs. 25,000 to Rs. 5 lakhs. Similarly, the tenure of the loan amount varies from bank to bank. Generally, a tenure of 6-60 months is related to the loan delivered.

  • Rate of Interest and Extra Fees:

A key side of COVID-19 personal loans is their considerably lower rate of interest. Aside from this, there aren't any additional fees within the type of prepayment charges and process fees.

Thoughts to Contemplate Before Applying

Whereas the provision of such loans could be a silver lining in the dark clouds, this does not necessarily mean that you should apply for this straight away. Bear in mind that the loan amount must be paid inclusive of the interest. If you are not sure about your future income possibility then it is best to avoid adding another liability to your head. A loan is always a liability to unbalance your finances, especially in dire situations. However, these loans are a great way to fill temporary gaps in your financial situation.

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