The State Bank of India had taken adequate measures to help people repay their loans when they and their families suffered from Covid. The ease of repayment and EMI options, along with the deferring of the instalments in selected cases, contributed to the economic betterment of the people.
Around 1 June 2021, the news was circulated about the State Bank of India offering a kind of unsecured loan, known as the Covid personal loan, at a reduced rate to all its customers. The SBI is now the largest commercial bank we find in the country, and it made it clear that all the existing customers who needed urgent financial help to deal with the Covid situation for themselves or their fellow family members could avail of the facility of this loan.
Also, there would be no need for any collateral for this loan. The SBI chairman Mr. Dinesh Khara also said that the Emergency Credit Line Guarantee Scheme would be available under this, and the collateral-free loan could amount to up to ₹5 lakh. It was a relief to those people and their families who were suffering from Covid. The rule was that the applicant for this loan would have to repay the loan within a term of five years.
SBI Kavach Personal Loan
The State Bank of India has introduced SBI Kavach, a personal loan program that can be utilised if you or any of your family members have been diagnosed with Covid-19 after April 1, 2021. By applying for this specific SBI Personal loan program, you can obtain the necessary funds to cover the expenses related to the treatment.
Features and Benefits of SBI Kavach Personal Loan Scheme
- Application for the personal loan scheme can be done offline or online, with online applications being pre-approved through the YONO mobile app.
- Being a customer of the bank is a requirement, regardless of whether you are a salaried, non-salaried employee, or a pensioner.
- The loan facility is offered as a term loan.
- Upon loan approval, the loan amount will be directly credited to your bank account.
- Maintaining a certain credit score is necessary, and the minimum score requirement is determined by the bank.
- No charges are applied for prepayment or foreclosure.
- There are no processing fees involved.
- No security or collateral is required to avail this loan.
- Repayment can be set up through a standing instruction on your account.
Eligibility and Documents Required
- This loan is available for salaried, non-salaried individuals, and pensioners.
- To avail this loan scheme, a Covid positive report needs to be submitted.
Does SBI Bank Provide Personal Loan
The State Bank of India (SBI) has announced this personal loan amount for certain applicants who have been suffering from Covid – 19 and would require funds to support the process of treatment. Although this is popularly known as the Covid personal loan, it appears to be an unsecured loan being disbursed by one of the largest banks in India.
However, being an applicant for the loan, experts suggest that you can utilise the same for getting yourself treated or use the fund to treat a family member. One of the significant advantages of taking such a loan is that you can get it without any collateral being asked for by the bank authorities.
How Is the Credit Made Available by SBI Bank?
The credit is made available under the Emergency Credit Line Guarantee Scheme (ECLGS). The scheme can provide a loan amount of ₹5 lakh in one go. However, you need to understand that the loan will never be interest-free. It will be charged an interest rate of 8% per annum, as stated by internal sources of SBI.
What is the Limit for Receiving Such Loans by SBI Bank?
As per sources, the minimum limit for obtaining such personal loans ranges from ₹25000. The upper limit for getting such loans remains to be ₹5 lacs. However, the amount shall be disbursed once the bank gauges the eligibility criterion. As per the data available, the loan shall be repaid by the applicant within 5 years.
Who Can Get Personal Loan From SBI?
Indian individuals who can avail of the loan include:
- Salaried staff
- Non-salaried staff
- Pensioners.
How to Avail COVID 19 Loan From SBI Bank?
To avail of the Covid 19 loan from SBI, the following steps can be taken:
- Once you go to the SBI loan app or visit the bank, you can check your loan eligibility and what will be the tenure of the payment and the type of interest that will apply to the loan
- There are also pre-approved loan statuses that you can check once and then apply for the loan
- Once you apply for the loan, an OTP number will be sent to the mobile number you have submitted to the bank, and then once the loan is approved, the disbursal amount gets credited to your bank account within a short time.
In 2020, the SBI also undertook specific regulations allowing more flexibility for loan payers. This was applicable both for personal loans and auto loans. The recovery of the EMI and the instalment options were deferred for many months, and they were allowed to pay their instalments as per their feasibility.
SBI Personal Loan for COVID Patient
For Covid patients, there was a particular loan that the SBI launched. It was also targeted at Covid patients suffering from this deadly disease and needing loans for the treatment of themselves and their families. The personal loan in this segment was known as the Kavach loan, meaning that it protected the people. This was in line with the Covid measures taken by the RBI: https://www.rbi.org.in/
What Are the benefits that You Can Get?
- If you want to apply, you can do so online and offline. The YONO mobile app is there, and you can check all about the loan scheme there
- First and foremost, you should be an active bank customer, either a salaried or a non-salaried employer, or you can also be a pensioner. It is a term loan for which you need to apply. And you have to maintain a specific credit score which is at par with what the bank says to its customers to keep
- The facility is that you do not have to go for any prepayment charges, and there are no foreclosure charges. There is not a single monetary amount you have to spend as a processing fee, and since there is no collateral or security, there is no additional pressure on you
- You can only know about the repayment option from your bank account or ask the bank for the details.
Moratorium Offers and the Time Duration Limit
If you want to know more about the moratorium process and the offers associated with it, then you can visit the bank’s official website. You can also check out the moratorium details by sending an SMS and waiting for the reply.
For NACH, for example, you can reply to VMN, where you find that XXXX is usually the last 4 digits of your bank account. Alternatively, before you avail of the loan and know everything about the moratorium process, you must know that a little extra can interest you might have to pay while you start the repayment process. If you want to avoid the moratorium, you can save a lot of money. Check the monetary problems and your current financial status, and then talk to your bank once regarding the repayment option.
FAQ
Is moratorium available on the SBI Kavach personal loan?
Yes, the customer's loan repayment period can be extended based on the duration of the moratorium period chosen by the customer.
Who can avail the SBI Kavach Personal Loan scheme?
The State Bank of India has introduced SBI Kavach, a personal loan scheme, which you can utilise if you or any of your family members have received a diagnosis of Covid-19 on or after April 1, 2021.
How is the loan amount disbursed?
This loan facility is available to individuals who are either salaried employees, non-salaried employees, or pensioners. The loan provided is in the form of a term loan, and once your loan application is approved, the loan amount will be directly credited to your bank account.
What is the number of EMIs in which I need to repay the loan?
The loan must be repaid in 57 Equated Monthly Instalments (EMIs), which includes the interest accrued during the moratorium period.
Conclusion
SBI Covid – 19 personal loans can give you much solace if you have suffered badly during the pandemic. The bank has brought several schemes to help Indian nationals to overcome such a significant crisis. However, making a process-oriented loan application can be difficult if you do not understand the process laid down by the premium banker. Application for loans can be made online, but banks must go carefully through the eligibility criteria to decide in favour of the applicant. You can contact Vakilsearch, a professional legal firm if you want professional assistance.
Must Read Topics:
