The State Bank of India (SBI) has recently announced a new personal loan plan — Kavach Personal Loan. The aim is to provide financial relief to thousands of people severely affected by the second wave of coronavirus pandemic. The collateral free loan will cover expenses of COVID-19 treatment of self and family members of the customer, the lender said.

The state-run lender, under the scheme, is providing collateral-free personal loans of up to Rs 5 lakh at an 8.5% annual interest rate, aimed at helping customers meet medical expenses of self and family members for COVID-19 treatment.

The loan can be availed by the bank customers who could be Salaried, non-Salaried or Pensioners. There will not be any collateral to avail the loan from the bank.

The personal loan is available currently at 8.5 per cent per annum for an amount up to Rs. 5 lakh. The tenure of the loan is 5 years which is inclusive of three months moratorium. For the 60-month loan, the amount has to be repaid in 57 EMIs, including interest charged during Moratorium.

The minimum loan amount that can be availed is Rs 25,000, while the maximum is 5 lakh as per eligibility of the borrower. There is no processing fee, no security deposit, no pre-payment penalty and no foreclosure charges while availing the loan.

Customers can also apply for this loan to pay their previous medical expenses. “Reimbursement of expenses already incurred for COVID-19 related medical expenses shall also be provided under the scheme,” SBI mentioned in a release.

“We believe this new scheme will offer much-needed financial assistance to the people to manage the COVID treatment-related expenses without any hassle. With this strategic loan scheme, our aim is to provide access to monetary assistance – especially in this difficult situation for all those who unfortunately got affected by COVID,” said Dinesh Khara, Chairman, SBI.

Banks have finalised three sets of products to build a COVID book under the RBI liquidity scheme. The measures include a healthcare business loan for setting up oxygen plants, business loans for healthcare facilities and unsecured personal loans for COVID-19 treatment. The rates on loans for oxygen plants will be charged at 7.5 per cent.

The loan is available at the SBI branches as well as through the Digital channel (Pre-approved through YONO). One can avail Pre-approved Personal loans instantly at their convenience on 24×7 basis through YONO app in a few click.