Amid the economic uncertainty triggering fears of job and income loss, lenders are likely to be conservative while issuing new loans for the next few months, which means only a limited segment of customers would be preferred by banks and other financial institutions. However, if one is in urgent need of funds, here are a few options one should consider first:
Pre-approved personal loans:
Most banks offer pre-approved personal loans to a select segment of customers, particularly those who have their salary account with the bank for some time or have had a long relationship with it. Since the bank is ware of the customers’ income, spends, EMI commitments, savings, employer etc., these loans are disbursed very quickly and are without any collateral requirements.
The loan amount one is eligible for and the interest rate offered depends on the individual’s income, employer, job stability, current debt, credit history, repayment capacity, etc., though it usually ranges from Rs 50,000 to Rs 20 lakh. Some lenders also claim to sanction higher loan amounts of up to Rs 40 lakh.
Gold Loan:
If you are going through a cash crunch, a gold loan could be a good option for you to quick loan. These type of loans are the quickest to be sanctioned and are usually cleared within the same day of receiving the application. You can use the gold jewellery or gold coins (With a minimum purity of 18 carats) lying idle in the locker, as security for your loan. The repayment tenure of gold loans usually goes up to 3 years with some lenders also offering longer tenure of 4-5 years. Banks and financial institutions generally offer 75 per cent amount of the current market value of the pledged gold.
One of the key advantages of a gold loan is the flexible repayment option offered by various lenders apart from the usual EMI option, many lenders allow repaying the interest amount upfront and settle principal amount towards the end of the loan tenure. Such flexible repayment options can be especially beneficial for those requiring funds, but lack uniform cash flows to repay through EMIs.
Loan against property (LAP):
It is sanctioned against the collateral of commercial, residential and industrial property. Interest rate starts from around 8.95%, and depends on lender, loan amount and credit profile of the applicant. Loan tenure can go up to 20 years. Loan amount will primarily depend on valuation of property and repayment capacity of borrower.
Top-Up Loan:
You can avail of the benefit of a top-up loan only if you have a home loan running with a good repayment track record. The main factor here is your LTV ratio. The total loan amount outstanding after the top-up loan must be within the same LTV range at which the loan was issued. So, example if you were approved for a loan of 80 per cent of your property value, then the total outstanding principal including the top-up loan cannot exceed this cap of 80 per cent
Additionally, the ensure of a top-up home loan cannot exceed the residual tenure of the original home loan, with most lenders further capping it at 15 years. While the usual time take for disbursal of such loans is generally 1-2 weeks, some lenders have also started offering pre-approved top-up home loans to existing home loan borrowers, with same day disbursal.
Covid -19 personal loans:
Some banks have started offering COVID-specific personal loans to help a select group of their existing customers who have their salary accounts with the bank or are existing home loan or personal loan borrowers from the bank and have a strong repayment history. These loans come with lower interest rates than regular personal loans and do not involve any processing fee either. Covid-19 personal loans usually have tenures of up to three years, though some banks are offering tenures of up to five years. Banks are also providing a moratorium of up to three to six months on these loans. However, borrowers need to pay the interest cost of the loan during the moratorium period.
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