PNB, Bank of Baroda, others launch COVID-19 personal loans; should you go for them?
Sahyog COVID-19 Personal Loan: People may be facing a money crisis during the lockdown period as they are not being able to go to their work and they may have exhausted their savings bank account.
Sahyog COVID-19 Personal Loan: People may be facing a money crisis during the lockdown period as they are not being able to go to their work and they may have exhausted their savings bank account. However, relief is on the way! A number of Indian public sector banks have rolled out COVID-19 Personal Loans. These loans are cheaper than Personal loans, which makes it a lucrative offer for those who are facing financial crisis during the lockdown. Currently, four of the Indian PSBs — Bank of Baroda (BoB), Punjab National Bank (PNB), Bank of Maharashtra (BoM) and Bank of India (BoI) have offered COVID-19 personal loan for its customers.
According to the Bank o Baroda website, "Lockdown status may create some temporary liquidity mismatch and to overcome the same Bank has launched a new Personal Loan scheme for it’s existing quality retail asset customers with relaxed assessment norms and lower rate of interest. This PL scheme will help to tackle present critical situation." Highlighting the benefit of this COVID-19 personal loan Bank of Baroda says, "Customer can avail facility for any purpose including temporary liquidity mismatch due to COVID-19 except speculation purpose."
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As these COVID-19 personal loans are for a specific purpose, most of the banks are offering COVID-19 personal loan interest rate to the tune of 15 per cent, which is still much below the personal loan interest rate. Generally, personal loans are available at an interest rate of 18 per cent in public sector banks, which can go as high as 24 per cent in the NBFCs. But there are certain conditions that a COVID-19 personal loan borrower needs to consider before opting for it.
COVID-19 Personal Loan Conditions
As the Covid-19 personal loans are meant only to help customers facing liquidity crunch due to the Coronavirus spread, they come with certain conditions.
Bank fo India, for example, is giving these loans to customers who are drawing salaries through the bank for at least a year, or to those who have an existing home or personal loan.
Punjab National Bank or PNB, which has named the product Sahyog Covid-19, is offering it to existing customers who are drawing their salaries through the bank. Even those who had a salaried account with United Bank of India and Oriental Bank of Commerce, which are now merged with PNB, are eligible for the loan.
Similarly, Bank of Maharashtra is giving it to home loan customers, and Bank of Baroda is offering it to existing borrowers who have home loans, or loan against property, or auto loans with the bank.
Should you go for it?
The interest rate offered in Sahyog Covid-19 or COVID-19 personal loans are quite attractive. However, one should not jump on it and apply for it. According to tax and investment experts, one should refrain from taking any further loans until it's very necessary because nobody knows how the Coronavirus spread is going to pan out in the coming days and how your finances would be after next few months. So, it's better to avoid taking any further loans till you can avoid.
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