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G. Madhan

YOUR loved one is hospitalised and needs surgery, but you do not have enough funds to meet the cost. Worried? You do not have to anymore. A host of loan products are now available that will help you meet such emergency medical expenses. The State Bank of India's (SBI) Medi-Plus Scheme is one such plan, which offers loans for individuals to undergo specialised and expensive surgical procedures, such as coronary bypass, angioplasty, orthodontic treatment, artificial limb prosthesis, and hip/knee replacement.

Who can take this loan? You need to be a government employee, an employee of a reputed private company/PSU or a pensioner with a minimum take-home pay of Rs 10,000 per month. Self-employed professionals with a net annual income of Rs 3 lakh and above and agents of insurance/Kisan Vikas Patra (KVP)/mutual funds with gross annual income of Rs 3 lakh and above, can also take the loan.

Pre-requisites

If you wish to take this loan, the treatment will have to be undergone in a hospital approved by the bank. You have to furnish proof of identity, residence, income and a passport-size photograph for documentation purposes. The bank charges a one-time processing fee of 0.5 per cent of the loan amount. However, the processing fee is waived for those who have already taken a housing loan through the bank.

Loan size

The minimum loan amount is Rs 50,000. The upper limit will depend on your income level. For instance, salaried individuals can get loans up to 12 times their net monthly income, subject to a ceiling of Rs 2 lakh. But the loan amount will also depend on how much of the bill you can foot. SBI finances up to 80 per cent of the total treatment cost; the rest you need to bear. The bank offers both floating and fixed interest rate options. At present, the bank charges 12 per cent as the fixed rate.

The floating rate, on the other hand, is pegged at 0.75 per cent above the State Bank Medium Term Lending Rate (SBMTLR). The SBMTLR stands at 11 per cent. You need to repay the loan in 60 equated monthly instalments.

Security

The collateral you need to offer depends on whether you can provide a check off facility — an undertaking from your employer to deduct EMIs from your salary. In that case, a collateral covering 50 per cent of the loan amount is enough. Otherwise, you will have to furnish a collateral to 110 per cent of the loan amount. Both immovable property and securities, such as the KVPs, NSCs, LIC Policies, can be lodged.

Suitability

This product is suitable for salaried individuals who have to meet an emergency medical expense. The interest rates charged under the scheme are more attractive than those on offer for personal loans. The catches are:

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