Earlier, several public sector banks had made the announcement that they would be providing personal loans of up to Rs 5 lakh. This was introduced to help individuals keep up with the medical expenses for Covid-19-related treatment. This was also part of the Covid-19 relief measures announced by the Reserve Bank of India (RBI) in early May when the second wave of the pandemic hit. These loans are being offered at a minimum of Rs 25,000 under the scheme. On the higher end of the loan facility, the cap-off amount is Rs 5 lakh. The repayment tenure for the loan is five years and the banks will not be charging any processing fees for the same. There is also a loan moratorium of three to six months depending on the bank. The loan itself comes at a concessional rate that begins at 6.85 per cent to individuals who are salaried, non-salaried individuals and even pensioners. The loans are collateral-free and can be used for oneself or for family members.
To avail these loans, however, there are a few conditions and criteria that need to be met by. For one, the bank will require proof of your Covid-19 status by way of a report that indicates that you have tested positive. You will also have to provide an undertaking as to the utilization of the funds, ensuring that it is indeed for Covid-19 treatments.
In terms of eligibility, the persons who can avail it are customers of the bank who drew salaries for the past 12 months. Persons who have taken a retail loan from the bank can also qualify. For non-salaried individuals, they will have to maintain a savings or current account with the bank with regularly filed income tax returns, in order to avail of the loan facilities.
Here are the Banks that Offer this Kind of Loan
1) State Bank of India (SBI)
The State Bank of India offers its customers an 8.5 per cent interest rate on the loans with the minimum loan amount standing at Rs 25,000 and a maximum of Rs 5 lakh. The tenure for the same will be five years within which the loan can be repaid. The loan is offered to salaried and non-salaried individuals as well as pensioners with the bank.
2) Punjab National Bank (PNB)
This public bank offers a loan for Covid-19 treatments under the brand banner of ‘PNB Sahyog RIN COVID’. This loan came into effect as of April 2021 and is meant specifically for the treatment of Covid for oneself or family members. This loan is only offered to salaried individuals with the bank and has been drawing salary for the past 12 months. It only applies to the government-employed or privately-salaried individuals who belong to the bank. With an 8.5 per cent interest rate the loan amount can be at most, six times the average of the six-month salary but with an upper cap of Rs 3 lakh.
3) Bank of Baroda
People who have borrowed loans from the bank before are eligible to apply for this loan. Customers who have been with the bank for at least six months or make regular instalments for the past 3 months are also eligible. The bank charges a monthly interest rate that can be calculated as the ‘Baroda Repo Linked Lending Rate’ + SP+ 2.75 per cent per annum with monthly rest.
4) Bank of India (BOI)
The Bank of India also only offers the loan to existing customers of the bank and to those who have existing personal or housing loans with the lender. The bank at present is charging a 6.85 per cent interest on the loan and it has a 3-year tenure along with a six-month moratorium. During the moratorium period, the customers are not required to pay instalments but the interest will keep growing.
5) Union Bank
The bank is offering the loan to customers at a maximum tenure of five years with an 8.5 per cent interest rate.
6) Canara Bank
This bank offers the loan under the name ‘Suraksha personal loan’. It performs the same function as the Covid-19 treatment loan. It also has a minimum loan amount of Rs 25,000 and a maximum of Rs 5 lakh. This specific loan has a six month moratorium period.