Should you take a Personal Loan or not During COVID-19 Crisis?

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The Covid-19 pandemic has derailed normal life and severely impacted the personal finances of the common Indian household. Sobering statistics of the effects of the pandemic keep on coming without any relief. Late salaries, pay-cuts, leave without pays, deferred salaries, loss of revenue for businesses are now the new norm. During these unprecedented times, lenders across the country have come forward with relief packages in the form of instant personal loans online.

Let’s see if taking a personal loan during the Covid-19 is a good idea or not. 

Loan Eligibility

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Despite these trying times, to apply for a personal loan, you need to adhere to the lender’s eligibility criteria. Some lenders may reduce the restrictions to help their existing customers or customers with good credit history. 

Some of the main eligibility criteria that you need to remember are:

  • Age should be above 21 years.
  • Should be employed or in business for more than 2 years at least.
  • Monthly income should be more than INR 15,000.
  • Should have 750 as the least credit score. 

Factors That Affect CIBIL Score For Personal Loans

  • Repayment history
  • Any outstanding credit card payments
  • Not having a mixed credit
  • High credit utilisation
  • Paying only the minimum amount due

Borrowable Amount and Interest Rates

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Typically, personal loan amounts range from INR 5 Lakhs to INR 20 lakhs, depending upon the need. Now, in this pandemic, you can get a loan to meet any liquidity requirements or even to consolidate your debt in one place. The interest rates may also be flexible depending upon various factors like loan tenure, your credit history, etc. This allows easy access to these loans. These loans are available at minimal processing fees. 

No Need For Paperwork

Desperate times call for desperate measures. Emergencies like this Covid-19 pandemic may bring you a big cash crunch but not enough time to put your documents together to go to a lender and apply for a loan. Hence, lenders across the nation have now started accepting complete personal loan applications online. All you need to do is keep a digital copy for the documents required and just upload them into your application form. You can do this from a computer or mobile phone, saving time to let you focus on other important things.

Loan Tenure

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Personal loan tenures range from 6 months to 4-5 years. For a smaller amount, you can go for a shorter tenure so that your repayment is done sooner. But in case you are taking a big loan amount, dividing it into smaller EMIs over a longer tenure would make a wise choice. This would reduce the burden of repaying the loan on your monthly income during the Covid-19 crisis. 

Loan Processing Time

Although there are lower processing fees, lenders are operating with reduced staff and facilities, the verification and disbursal of the amount might take a couple of days. To expedite the loan application process, lenders are accepting applications for an instant personal loan online on their websites.

Apply Only If:

  • you have an outstanding debt that you need to repay as soon as possible.
  • you have a medical emergency.
  • you want to consolidate your debt.
  • you are facing a financial crunch.
  • you don’t want to dip into your long-term savings.
  • your investments are already utilised or can’t be liquidated yet.

Before you decide on a lender, be sure to shop around. Look for the best suitable package for you. You can also bargain for interest rates or tenures. With this, you can end up with a great deal on your personal loan, with reduced debt pressure. Click here to know more. 

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