Things to know about SBI’s Kavach before availing it for covid

The loan is offered to salaried and non-salaried persons, and pensioners. Thus, to get the loan amount sanctioned, any of these SBI customers will be required to submit a covid positive report.

They can avail of a minimum loan of ₹25,000 and a maximum of ₹5 lakh as per their eligibility. The bank will sanction the loan depending on requirements such as CIBIL score and the loan repayment capacity of the borrower. However, this will further depend on the bank’s internal policy.

The rate of interest levied by SBI for Kavach personal loan is kept at 8.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} per annum; this rate is currently set on the lower side. Normally, the interest rates are on the higher side for unsecured personal loans, i.e., loans sanctioned without collateral.

Currently, personal loans offered by SBI for a tenure of five years draw a rate of interest between 9.6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and 13.85{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. The loanee also needs to pay a processing fee of 1.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of the loan amount (minimum ₹1,000 and maximum ₹15,000) plus goods and services tax.

To avail Kavach personal loan, customers can visit any of the nearest SBI branches. By visiting the bank branch and duly completing all formalities, documentation, KYC (know your customer), etc., they can get the loan sanctioned.

If you are a mobile banking user, you can also get it through the digital channel. The loan usually gets pre-approved through SBI’s YONO app and you get the loan amount instantaneously.

Reimbursement facility is also available through the branch channel. This means the loan scheme also provides reimbursement for the amount that has already been incurred by you towards the treatment of covid-19. Besides, Kavach loan will be over and above existing loans, if any.

While opting for a Kavach personal loan, SBI customers are not required to pay any processing fee, security deposit, pre-payment penalty or foreclosure charges.

The loan is offered for five years, i.e., 60 months. This includes a three-month moratorium period. It means that the loan, which is to be repaid in 57 equated monthly instalments (EMIs), includes the interest charged during the moratorium period.

A moratorium period is a time during which you are not required to make any repayment. It is a waiting period before which the repayment of loan EMIs resumes.

In normal cases, the repayment begins after the loan is sanctioned and the payments have to be made every month. However, in the case of the SBI’s Kavach personal loan, you don’t need to pay EMIs for the first three months and you can pay thereafter.

In the case of repayment of Kavach personal loans, standing instructions on salary, pension, savings or current accounts will be facilitated. This means that instead of initiating specific transactions each time, the bank will issue a standing instruction to the account of the customer wherein regular transactions or EMIs can be processed and paid to the bank automatically on a pre-defined date. If you plan to avail of the Kavach personal loan, you must try to repay it as soon as possible as you are not required to pay any foreclosure charges.

This will help you save on the interest amount, which if paid for a longer duration can impact your finances.