Thursday, December 9, 2021

The 6 Best Quick Loan Options For Covid-19 Treatment in India

The pandemic has caused untold destruction both financially and mentally. In India, currently, Covid-19 treatment runs up to a few lakhs. Despite the government curbing the costs of medical treatment for Covid-19 in private hospitals, the treatment costs are still huge. Especially, if a patient requires a ventilator, speciality drugs like Remdesivir, Ivermectin, it becomes challenging for the patient’s family to pay out of pocket. Added to the Covid-19 woes are now the expensive treatment for black fungus and other allied diseases. 

Thankfully, the majority of health insurance plans cover the treatment costs for Covid-19. However, if you’re someone who has no insurance cover or no contingency fund to rely on, then you may find it challenging to raise the cash required for treatment. 

Even if you have a health insurance plan, the hospital may ask you to pay upfront during admission. Also, if you’re able to secure a bed only at a non-network hospital, then you may have to pay the fee upfront before treatment commences. 

If you’re looking to raise money in a hurry for Covid-19 treatment, here are a few instant loan options that can give you a supporting hand. With the pandemic still wrecking untold damage across the country, being informed about the various financial options for Covid-19 treatment is a good idea. Even if you don’t require financial assistance, you can share this knowledge with friends and family and give them a lending hand during these stressful times. 

Easy Loan Options for Covid-19 Treatment

  • Covid-19 Treatment Loans from PSU Banks 

Several public-sector banks like Canara Bank and SBI and a few private-sector banks have announced special loans for individuals to meet the costs of Covid-19 treatment for themselves or their family members. 

Pros:

  • These loans are offered to salaried, self-employed and retired individuals. 
  • The loan amount ranges from Rs. 25,000 up to Rs. 5 lakhs. 
  • The interest rate at SBI on loans for Covid-19 treatment is 8.5% and the loan is sanctioned for a maximum tenure of 5 years.
  • Some banks like Canara Bank offer a moratorium on repayment – you can start loan repayment after six months. 

Cons:

Eligibility and loan availability varies from bank to bank. 

  • Personal Loans for Covid-19 Treatment 

 A personal loan is one of the easiest and fast sanctioned loans. There is no restriction on the end usage of funds – meaning you can use it for any purpose, including medical treatment for your loved ones. 

Pros: 

  • No need for collateral or security, as it is an unsecured loan. 
  • The loan amount sanctioned depends on your income, employment and credit history. 

Cons:

The downside of personal loans is steep interest rates, documentation charges, processing fees and miscellaneous charges. 

  • Gold Loans for Covid-19 Treatment 

A gold loan is another excellent way to raise cash immediately for Covid-19 treatments. Generally, gold loans are sanctioned within minutes at NBFCs like Mannapuram, Muthoot Finance. In banks, the processing and loan sanction takes 1 or 2 days. 

Pros:

  • It’s a secured loan, so interest rates are cheaper than personal loans. 
  • Loan tenure up to two to three years. 
  • Flexible repayments – choose from a variety of repayment options like regular EMIs, EMIs only on the interest and repay the principal at the time of loan closure, one-shop repayment at the end of loan tenure. 
  • Banks and NBFCs lend 75% to 90% of the gold value as the loan amount. 
  • No need for a credit score or credit history for gold loan eligibility. 

Cons:

  • The loan is not available if you don’t have any gold jewellery to pledge and the loan amount depends on the value of the pledged gold jewellery. If you fail to repay the loan, your pledged jewellery will be auctioned by the lender to recover the costs. 

  • Loans against Fixed Deposits, Insurance Policies for Covid-19 Treatment 

If you have a fixed deposit, mutual fund wealth-generating insurance policy or DEMAT share, you can pledge these securities to raise a loan. In this case, you’re not selling the asset – fixed deposit, mutual fund or DEMAT share – rather, you’re using it as collateral to get a secured loan. 

Pros:

  • The interest rates on these loans are lower than personal loans. 
  • The maximum loan amount sanctioned depends on the current value of the asset,
    • 60% to 90% of the surrender value of the insurance plan 
    • 50% to 60% of the mutual fund value or DEMAT share 
    • 80% to 95% of the amount held in a fixed deposit/savings account 
  • The biggest benefit of this loan is that you can raise cash against the asset quickly. You regain complete control of the asset once you repay the entire loan amount. 

Cons:

This option is not possible if you don’t have an asset like a fixed deposit, mutual fund, insurance policy. 

  • EPF Loans for Covid-19 Treatment 

If you’re a salaried individual, with an EPF (Employees’ Provident Fund) account, you qualify for an emergency EPF loan. You can withdraw/borrow funds from your EPF account for medical reasons. 

Pros:

  • As per revised EPF guidelines, employees can partially withdraw funds from their EPF account for the treatment of spouse, children, parent or sibling. 
  • Since this is technically not a loan – but withdrawal from your account – there are no interest charges nor repayment. 

Cons:

EPF funds are primarily meant for your retirement. By withdrawing now, you lose a significant chunk of your retirement corpus. This can have long-term repercussions. 

  • Loans against Credit Cards for Covid-19 Treatment 

Did you know that you can take a loan against your credit card? A credit card loan is similar to a personal loan and doesn’t require additional documentation. Generally, these loans are pre-approved and are sanctioned immediately. 

Pros:

  • Immediate sanction, quick disbursal and zero documentation. 
  • Loans are pre-approved up to a specific limit. 

Cons:

  • Steep interest rates. 
  • You may not be able to use your regular credit card limit until the borrowed amount is repaid. 

3 Key Points to Keep in Mind before Applying for a Loan for Covid-19 Treatment

  1. We know that it can be extremely tempting to choose the first loan offer you come across, especially when a family member is in dire need of cash to commence the treatment. Still, make sure to compare interest rates. This way, you won’t be burdened with a massive debt after the crisis is over. 

Shorten the search for the best loans on the market by using a loan aggregator like CreditMantri. CreditMantri lists out the best loan offers for you matched to your credit profile. So, you can compare loans from different lenders on the same page and choose the best one that works for you. 

  1. Track and monitor your credit score and credit history, even before you require a loan. If you suspect that you might need a loan in case of a medical emergency, it pays to work on improving your credit score before the situation arises. 

Having a high credit score is beneficial in several ways. It improves loan eligibility, fetches you the best interest rates and gets the lender to grant your loan immediately. 

  1. Instant loans for Covid-19 treatment are sanctioned immediately. The loan amount reaches your account within 24 – 48 hours. 

You can repay the borrowed amount in the form of monthly EMIs, as per the repayment schedule agreed during loan sanction. 

Other Options to Raise Money for Covid-19 Treatment 

While there are several loan options to raise funds for Covid-19 treatment, be cautious. Take a loan only if you don’t have any other choice. Instead of taking a loan and increasing your liabilities, it’s better to liquidate an asset in this current financial situation. Explore other alternatives to raise money like redemption of mutual fund units, premature closure of a fixed deposit, withdrawing money using your credit card, selling a plot or borrowing from friends and family. 

Irrespective of the method you use, make sure to repay the loan on time so that you’re not slapped with additional interest burden and late penalties. 

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