Stressed About Finances During COVID? Know About The COVID-19 Personal Loan

The COVID-19 pandemic has rocked every aspect of regular life. The concerns about health and life have tremendously increased with precautions like masks and social distancing becoming a new norm.Apart from mental stress, the crisis has created an economic turmoil for everyone in general. The jolts in the regular income can be felt by everyone, whether you are a business owner, a salaried employee, or a freelancer. While the income flow is facing fluctuations, the expenses remain steady if not increasing.This has prompted multiple public-sector financial institutions to come up with special COVID-19 personal loans. Here is everything you need to know regarding the loans offered:

• The Aim Behind the Loan: The lenders are offering COVID-19 personal loans to help their customers in procuring quick loans with relaxed conditions . The loan can help the procurers in mitigating any cash crunch they are currently facing. This comes as a ray of hope since salary cuts and decline in business have been on the rise since the onset of the pandemic.
• Eligibility of COVID-19 Loans: Prominent and established financial institutions with significant clientele have introduced the COVID 19 personal loan . If you have an existing product with these institutions, then you are eligible to procure the loan. Under this scheme, the loans are being offered to the existing customers only. Also, if you have a loan history from the lender, especially home loan, then you too can avail the loan offered. Here, the catch is to have a satisfactory credit score and a good repayment record.
• Loan Amount and Tenure: The range of the loan amount tends to differ based on the financial institution in consideration. Also, your profession and previous interaction with credit affect the loan amount offered to you. In general, the loans are being offered in a 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 associated with the loan delivered.
• Rate of Interest and Additional Fees: A key aspect of COVID-19 personal loans is their significantly lower rate of interest. Apart from this, there are no additional fees in the form of prepayment charges and processing fees.

While the availability of such loans is a silver lining in the dark clouds, this does not necessarily mean that you should apply for this straight away. Let's not forget that the loan amount needs to be repaid along with interest generated. If you have apprehensions surrounding your future income, then it is best to avoid adding another worry to your head. However, these loans can be a great way to fill temporary gaps in your financial situation.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.