A few banks have come up with details of the eligibility criteria for this loan. According to the Union Bank of India's website, the interest rate will be 8.5%, and the maximum tenure will be five years. Typically, personal loans from PSBs charge 14-18% a year.
The bank has three eligibility criteria for the loan. One, customers who are drawing salaries or pension through the bank for the past 12 months. Two, those who have taken a retail loan (home, vehicle, mortgage, personal and cash loan) from the bank. Three, non-salaried individuals who maintain a savings or current account with the bank and have been regularly filing income tax returns.
Canara Bank offers a similar Suraksha personal loan with the minimum and maximum amount of ₹25,000 and ₹5 lakh, respectively. The Canara Suraksha scheme will also provide a six-month moratorium.
Even last year, public sector banks had launched covid-19 personal loans. But those were to meet the cash crunch due to the pandemic. Those loans were also available for existing customers and were priced aggressively – some as low as 7.2%.
While the personal loan for treatment of the covid-19 is available at cheaper rates, opt for them only if you are facing a temporary cash-flow problem. You can avoid them if there's uncertainty about cash-flows. It's best to avoid liabilities in the current environment.
Instead of taking a new liability, it's better to liquidate an asset.