SBI News | SBI’s Kavach Personal Loan for Covid Treatment: Know the Details Before Borrowing
SBI’s Kavach Personal Loan for Covid Treatment: Know the Details Before Borrowing Photo credit: BCCL
New Delhi: In an effort to provide financial assistance to clients struggling with cash shortages for treatment during a pandemic, the State Bank of India (SBI) is offering a loan for the treatment of covid-19 at the interest rate on lower. The state’s public lender has launched an unsecured loan offer to those who have an account at one of the SBI branches and need money to cover medical costs related to covid-19 treatment on their own and members of his family from April 1.
Personal unsecured loans aim to enable clients to cover the medical expenses of their own members and family members for COVID-19 treatment, the SBI said.
The program, launched by SBI Chairman Dinesh Khara, will allow clients to “avail loans of up to Rs 5 lakh at an effective interest rate of 8.5% per annum for 60 months, which includes a three-month moratorium, “according to a statement released by the Bank.
Customers can benefit from a minimum loan of Rs 25,000 and a maximum of Rs 5 lakh depending on their eligibility. The loan term is 5 years, which includes a three-month moratorium. For the 60 month loan, the amount must be repaid in 57 IME including interest charged during the moratorium.
Loans under the Kavach program are offered “in the category of unsecured personal loans and at the cheapest interest rate in that segment,” SBI said.
Reimbursement of expenses already incurred for medical expenses related to COVID-19 will also be provided under the program, the bank said.
Dinesh Khara, Chairman of SBI, said, “We are pleased to introduce the SBI Kavach personal loan program to help those affected in the aftermath of the COVID-19 crisis. We believe this new program will provide much needed financial assistance to people to manage expenses related to COVID treatment without any hassle. With this strategic loan program, our aim is to provide access to monetary assistance – especially in this difficult situation for all those who have unfortunately been affected by COVID. At SBI, we constantly strive to work on creating financial solutions tailored to their needs for clients.
The bank will sanction the loan based on requirements such as the CIBIL score and the borrower’s loan repayment capacity. However, it will also depend on the internal policy of the bank. The interest rate charged by the SBI for the Kavach personal loan is maintained at 8.5% per annum; this rate is currently set on the lower side. Usually, the interest rates are higher for unsecured personal loans, that is, sanctioned loans without collateral.
Currently, personal loans offered by SBI for a period of five years carry an interest rate between 9.6% and 13.85%. In addition, borrowers must also pay a processing fee of 1.5% of the loan amount (minimum Rs 1,000 and maximum Rs 15,000) plus goods and services tax.
In order to benefit from the Kavach personal loan, SBI clients can visit one of the nearest SBI branches. By going to the bank branch and duly completing all the paperwork, documentation, KYC (know your client), etc., they can get the loan sanctioned. For those who use the SBI mobile banking service, this loan can be used through the digital channel. The loan is usually pre-approved through SBI’s YONO app and you get the loan amount instantly.