Is it harder to get loans from banks during the COVID-19 crisis?

get loans from banks during the COVID-19 crisis

The COVID-19 crisis has crippled the economy of the world in the first quarter of 2020. People are running out of jobs and are losing out on income sources. People became forced to take a loan to run their households. The global economy has entered a state of standstill. The governments around the world have announced lockdowns because of the nature of virus transmission. Due to this lock-down, the companies are unable to continue their work. Their employees are suffering from pay cuts and job losses.

The global pandemic has forced the global economy to come to a halt. It is uncertain to predict when things and situations will be normal again for the world. To survive in this COVID-19 crisis times, people have to get a loan just for the sake of surviving. The most important purpose of getting a loan is buying the essentials and paying the bills. Essentials include food, shelter, and clothing. With no active sources of income, the only ray of hope left for people is to get a loan.

Loan management – Moratorium

A recent problem has come up in the news and it is none other than the loan repayments. The COVID-19 crisis came in without a warning and people were unaware of the pandemic. The existing loans such as student loans, credit card bills, personal loans, and home loans have to be paid. The EMIs have their dates set and the bills generate in time. Now, what you can do in this situation?

One of the most important things you can do at this moment is opt-out for the moratorium. Before you take up any extra loan, you can set aside your existing payments for a stipulated duration of time. You need to remember that you have to pay the set-aside amount after the time gap. Think of getting a loan keeping in mind about the moratorium

The cash needs

Now you have set aside your burden of loan and you need not worry about paying them in the next few months. You are now ready to get a loan and meet your expenses. You have additional cash requirements and you need cash in your everyday life. Let us dive into the sources from where you can get a loan in the COVID-19 crisis:

Lending startups

There are several lending startups in the country which offer microloans. These are small companies that are willing to lend money to the needy ones. Their microloans come with a very high-interest rate and are one of the credit options available to you. If you need money urgently, then the money lenders are the ones to get a loan from.

Personal loans – Pre-approved

You can get personal loans which are pre-approved during the COVID-19 crisis. All you need is to have a good credit history to get this type of loan. You can maintain a good credit history by clearing the outstanding bills within the due date. Bills such as credit card dues and EMIs should be paid instantly. The personal loans are available across the marketplaces and are offered directly by banks. The banks transfer the loan amount to the bank accounts. This is a very good option for people who have taken loans in the past and have cleared them.

Mortgage loans

Mortgage loans are one of the promising loan options for people in the COVID-19 crisis. You can avail of mortgage loans if you have invested in fixed assets and possess a debt-free property. Mortgage loans are offered at attractive interest rates. Your assets become collateral during the sanction of the loan. This is a good option for people who want to take loans against their assets and property.

Financial assets loans

Financial assets such as stocks, mutual funds, and endowment plans can help you to get loans during the COVID-19 crisis. Just like mortgage loans, the financial assets will act as collaterals in this type of loan. You can avail loans against your financial assets and traditional insurance products instead of going for the moneylenders. This is a decent option for people who want to take loans against their assets and property.

Overdraft

The salaried professionals are offered loans as a multiple of 3 to 5 times their monthly salary. This type of loan is also known as overdraft or credit cash lines in the market. The overdraft loan facility has the flexibility to withdraw funds as per your needs. You pay interest only on the utilized amount. You will incur an interest rate of 14% to 21% for each day of usage.

Line of credit

On the other hand, a line of credit is a flexible loan from a bank or financial institution. It is similar to a credit card because it offers you a limited amount of money to borrow. A line of credit is a specified amount of money that you can fetch as needed and then repay immediately after some time.

A line of credit will charge interest as soon as you borrow the money, and it is mandatory that the borrower must seek approval from the bank. A good credit rating can help you fetch instant approval from the bank. This seems to be a good source to get a loan in the COVID-19 crisis.

Family and Relatives

This is the last option for you during tough times. There may come a time when all the possibilities of getting a loan from the above sources become impossible. The only option left with you is the family and your relatives. You need no assets to put against to get a loan. This is a good option because you do not have to worry about the interest rates against your loan.

Top 5 car loans in India in 2020 that you can consider taking

apply for car loan

There was once a time when buying a car was supposed to be dream by only the wealthy and upperclassmen. However, right now it has turned into a necessity. Top banks are giving popular car loans in India at much convenient interest rates. Hence, we are trying to give a list of the top 5 banks giving the most affordable car loans in India. Here’s a list for an instance:

Popular car loans of 2020: 

SBI Bank:

The most important benefit of the SBI car loan is that it has NIL processing charges with no foreclosure charges. You can take a car loan with tenure of a maximum of 7 years, for instance. The fixed interest rate for SBI car loan is 9.30% to 9.80%. To sum up, you can avail of a loan if your income as a salaried employee is 2.5 lacs p.a and your net profit is 3 lacs p.a as a self-employed professional. 

Axis Bank:

Axis bank offers a loan of maximum up-to 8 years. The processing charge is a minimum of Rs. 3500 and a maximum of Rs. 5500. The foreclosure charge is 5% of the principal outstanding. To sum up, you can avail of a loan if your income is 2.4 lacs p.a as a salaried employee and turnover is 1.8 lacs p.a as a self-employed professional. 

HDFC Bank:

HDFC offers loans for a wide variety of cars and multi-purpose vehicles up to 3 crores for a tenure of up to 7 years. The processing charge for HDFC bank car loan is 0.4% of the loan amount, 3000 Rs minimum and Rs. 10,000 maximum and foreclosure charge is up to 6% of the principal outstanding. To sum up, you are eligible for an HDFC car loan if your income is a minimum of 3 lacs p.a as a salaried employee or as a self-employed professional. 

ICICI Bank:

ICICI bank is one of those banks that offer loans for new, pre-owned cars and even provide loans against the car. The interest rate is from 8.65% to 16.70% for tenures up to 7 years and the foreclosure charge is 5% of the principal outstanding. To sum up, you are eligible for a loan if your income is 2.5 lacs p.a as a salaried employee and 2 lacs p.a as a self-employed professional. 

PNB: 

PNB gives loans for multi-utility cars and sports vehicles. The processing charge is up to 6 lacs, while the minimum amount being Rs. 1000. The foreclosure charge is 2% of the outstanding prepaid. To sum up, you are eligible if your income is 2.4 lacs p.a as a salaried employee. 

All You Need to Know About Two Wheeler Loans

two-wheeler loan

People crave comfort and that, of course, comes with a new vehicle. Besides that, owning a two-wheeler is still an achievement even in many societies like India. As the market has started flooded with many fascinating two-wheelers, people purchases these bikes not for only regular use, but also they purchase their two-wheelers to fulfill the dream of having an alluring bike. Further, most of the people start their vehicle riding journey with the two-wheeler. So if you are also decided to purchase a new two-wheeler, a Two Wheeler Loans are one of the best and safe way to purchase a two-wheeler and to finance the purchase as well.

 

 Below we are describing some basic information that can help to get the Two Wheeler Loans

 

 You have followed certain eligibility criteria:

When you are applying for the two-wheeler loan, then the process is quite convenient and easy. But there is an age-eligibility criterion that applies for all. If you are a person who is below the age of 21, then you cannot apply for the two-wheeler loans and it is the most important criteria in the case of a two-wheeler. The person whose age stands between 21-58, they can apply for the loan. Before applying for the two-wheeler loan you must know

  

 You have to follow the documentation process:

Unlike other loans, a two-wheeler loan has a less difficult loan disbursement process. Although it is a very easy process yet to complete this process successfully, it is very essential to submit all the documents, because all your documents will make approve your two wheeler loan. Here is the document list that you need to provide

 

  • Age proof
  •  Photo-ID
  • Driver’s license
  • PAN card
  • Voters ID card
  •  Your passport
  • Tax receipts
  • electricity or telephone bills 
  • Proof of residence.
  • Most recent salary slip 
  • Bank statements 
  • A regular source of income  source
  •  If you are a businessman then the balance sheet of your business
  •  A vehicle purchase receipt or purchase invoice



  You have to mention the loan structure:

Unlike many other vehicle loans, it is almost impossible to cover the whole cost of the vehicle with the help of a two-wheeler loan.  And yes it is a bitter fact. Actually, the two-wheeler loan helps people to get a substantial amount to buy the vehicle, but this loan generally does not covers the whole amount. This loan covers a maximum 85% cost of the vehicle but the rest 15%, you need pay to owe the vehicle.

 

 Know your repayment tenure:

Two-wheeler loan costs less in comparison to many other loans. The repayment tenure is related to the vehicle loan remains between 12 months to 36 months. You can select your repayment period as per your convenience and preference. However, this tenure period varies from one financial institution to another financial institute. Apart from that while you are deciding over the time period, think thousands of times before selecting it, whether you will able to continue to repay the loan within that period or not. This planning will ensure to get rid of the risk of loan default.

 

 Online loan:

 It is very simple to apply for the two-wheeler loan on the online mode. If you have already decided to apply for the loan, then we recommend you to go for the online mode as this is hassle-free and time-saving. Nowadays thousands of financial institutes come with the online two wheeler loan process and they provide many facilities along with many offers. If you apply for the loan in online mode, then you have the option to avail of the offer. Besides that, you can upload your documents through the site of the particular financial institute and so in this way you can also maintain your privacy.

 

 Other things that are important for getting the two-wheeler loan is written below:

 

  •  You need to have a high credit score to get the two-wheeler loans. However, some of the financial institutes offer a two-wheeler loan in minus credit score. But needless to say, no financial institute  grants two-wheeler loan to those individuals who have the credit score below 700,  
  •  You have to provide credit assurance
  •  You have to show an established source of income.

 

To conclude, we can say this basic information related to vehicle loans may help you in an overwhelmed way.