The covid 19 was initially started on 31/12/2020 by the WHO(world health organization ). Later on 30/1/2021, the world health organization considered covid 19 as a world health emergency issue. on 11/3/2021 the WHO considered it as a pandemic.
In India during the pandemic, the govt and few banks introduced special loan schemes for people in need of emergency money.
1. IND- COVID Emergency Credit Line (IBCECL) for Corporate: this will provide 10% of the working capital and has a limit of 100 crores.
2. SHG-COVID - SAHAYA LOAN for Self Help Groups: these loans were provided for the self-help group (SHG).
3. IND- MSE COVID Emergency Loan— (INDMSE-CEL) for MSME: this will provide 10% of the working capital and has a limit of 50lakh.
4. IND-COVID Emergency Salary Loan for Retail borrowers: the salaried people will be given a loan amount up to 20 times their gross salary per month.
5. IND COVID- Emergency Pension Loan for Pensioners:15 times the pension that he receives and with a max limit of 2 lakh.
During the lockdown, the financial market resulted in an acute financial crisis. For the people who already had loans debts upon their heads, had a hit as they were in no situation of paying the money, as they were on the brink of being unemployed .as entire financial make was impacted by the total shutdown of its operations, due to coronavirus, it took its time to come back with help for the people.
Along with the risk of not being able to pay the repayment EMI. The people who have taken the personal loan had a greater risk of losing the credit score. As a personal loan has a higher risk factor, it reduces one credit score when one doesn’t pay the EMI. Vijaya Bank personal loan also provided financial help during the pandemic season.
Did covid really affect personal loan?
Higher Default Possibility :During the lockdown and the pandemic, people started losing a job and they started becoming unemployed - as the company were unable to keep up with the salary of every employee as most of the company were running on loss due to many factors like lack of customers etc. Due to non-payment of loans - the number of bad loans increased rapidly as a result of covid 19. As a result of the pandemic the economic growth slowed.
Should You Worry About Your Personal Loan Repayment?
In the repercussion of the coronavirus lockout, it all comes down to two things: job protection and revenue. If your source of income is consistent, repaying your personal loan EMI will not be a problem. However, since the existence of the COVID-19 pandemic is unknown, if you decide to pay your EMI late to save money or for other financial reasons, In addition to the interest, you will be charged a late payment fee. On the other hand, those who are uncertain about their job security or who have lost their job due to the coronavirus will find it difficult to repay their personal loans. You may get a new personal loan or a personal loan moratorium in this case.
About Personal Loan Moratorium
As announced by the RBI, the borrowers who already have an existing loan on the 1st of march - who have at least one payment due -can explore an EMI moratorium till august 31 2020. After applying with moratorium no amount will be deducted from the borrowers account for three months also will not affect the borrower’s credit score.
Conclusion
Covid 19 affected the entire profit organizations and non-profit organizations. As a result, the people started losing their jobs and becoming unemployed, this affected the loans as people were unable to pay the EMI of the existing loans.
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