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What is the best bank for a personal loan during the pandemic COVID-19?

The COVID-19 pandemic brought about situations that have never been heard before, such as social distancing and indoor living. The lockout is still in force and has led to incidents such as wage cuts and delays, job losses and businesses. Since the usual KYC method has come to a standstill due to the lockout, the banks have stopped lending. But there are banks like HDFC which give personal loans to individuals who have private creditors’ salary or savings accounts. And if you have such a partnership with HDFC Bank, you can apply if you need the loan.

Should you request personal loan schemes from COVID-19?

Looking at the liquidity crunch that many people are facing in the midst of the lock-out caused by the COVID-19 pandemic, PSU lenders come with personal loan systems. The rates of interest are competitive. But does it call for an application for a personal loan? Certainly not, if you get pay, though late. Even if you take a reduced wage home, you won’t get a personal loan. The effect of a wage cut can be like nothing if you compare the costs of travel with what might have been during the pre-lockdown era.

But what about those who have lost jobs or business income? Here, too, these loans are only welcome if there are no savings in the current phase. However, a loan will only make sense if you assume that you can conquer the worst stage early. Although the moratorium extended to 31 August 2020, from 31 May 2020, can be used, a credit is not your target unless you can rapidly solve the liquidity crunch. You must remember that the moratorium is not an EMI exception, but that it is the extension of the accumulated interest to the main interest. When the moratorium comes to an end, the EMI (original loan amount + accrual interest) charged will be higher than when you take out a loan without using the moratorium option.

Eligibility for applying Personal Loan

Individuals and not businesses are granted a personal loan as the name suggests. Most banks and NBFCs offer personal loans both to employed and self-employed individuals / professionals. The personal loan eligibility criteria vary slightly depending on the type of candidate. The following are some of the main eligibility criteria for personal loans that need to be remembered *

Particulars Salaried Self-Employed
Age 21 – 60 years 21 – 68 years
Minimum Income Rs. 15,000 per month Rs. 5 lakh per year (gross)
Employment stability Total experience- Minimum 2 years Minimum 2 years in current business
Experience in the current organization- Minimum 1 year

Characteristics of Personal Loan

Personal loans are flexible end-use unregulated loans usually ranging from 12 months to 60 months. When a shorter term is chosen, each EMI is higher, while a longer term results in lower EMIs. The key characteristics of a personal loan are:

Attributes of Personal Loan

Personal Collateral Loan No Collateral / Security Required:

You don’t need a guarantee like a house or a car to make use of a personal loan. The loan is only approved on the basis of your creditworthiness depending on your credit, income, repayment history, reputation of your employer, etc.

Flexible end use

Personal loans can be used for several purposes, as opposed to car loans or home loans, such as medical expenses, travel, house renovations, debt consolidation and so on.

Flexible tenure Flexible term

Personal loans typically run from 12 months to 60 months and are subject to flexible term.

No paperwork Limited paperwork

You can apply online or even offline for a personal loan with minimal documentation. Key documents that are generally required to be provided by the lenders include proof of identity, proof of address and proof of income.

Quick disbursement Quick Discharge

Personal disbursement of loans can take place within a few hours after the application has been approved. Turnaround times can also be as low as a couple of minutes if you can use a prepayment loan.

Flexible Loan amount

The eligible personal loan amount is based on a person ‘s repayment history, monthly income , age, profession, reputation of the employer and other such factors. Lenders provide personal loans of 10,0000 to 40 lakhs

Documents Required for processing Personal Loan

Identity Proof

PAN Card / Voter’s ID / Aadhaar Card, Passport/ Driving License Identity Proof Identity Proof

Address Proof

Bank Account Statement / Adhaar Card / Purchase/ Property Bill / Passport/ Driving License / Energy Bill (not older than 3 months old).

Earnings of proof of income for Salaried persons

Salary Slip/ Bank account statement / Form 16

For self-employed persons

Previous year’s ITR / P&L statement and balance sheet / bank account statement.

Customer Business Proof

Certificate of Practice / Partnership Registration / GST Registration / MOA / Shop Act License and Filing Documents


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