EMI Moratorium: If you had taken the facility of loan moratorium of RBI during lockdown then now you are going to get relief by paying interest on interest. The government had informed on Saturday that the compound interest will be waived for the 6-month moratorium period. However, only those borrowers up to 2 crore will get this rebate. Explain that due to corona epidemic, people struggling with economic problems were given the option of the moratorium. This facility was available from 1 March 2020 to 31 August 2020. The government has also issued guidelines regarding exemption from interest on interest in the moratorium.
Under this government scheme, the borrowers have to pay simple interest on their loan amount for a period of 6 months between March and August in lieu of compounding interest. If the borrower has paid his EMI on time, he will get a cashback from the bank equal to the difference between the compound interest rate and the simple interest rate.
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Who are eligible for interest exemption on interest
The borrowers of MSME loan, education loan, home loan, consumer durable loan, credit card balance, automobile loan, personal loan and consumption loan scheme. However, the loan amount should not exceed Rs 2 crore. The loan account should be standard by February 29, 2020.
The lending institution should be a banking company, public sector bank, cooperative bank or regional rural bank, all India financial institution, non-banking financial company, housing finance company.
Payment will be made to the customer’s loan account. Whether the customer has fully, or partially, benefited or not. That is, even if you have not opted for the Moratorium, you are still eligible under the scheme.
How much will be the amount deposited in the account
Under this scheme, the difference between compound interest and simple interest will be credited to the customer’s loan account for the period between March 1, 2020 and August 31, 2020.
Calculations will be done on February 29, 2020 at the rate of interest.
How much will be saved
On a home loan of 25 lakhs
Loan amount: Rs 25 lakh
Rate of interest: 8% per annum
Moratorium period: 6 months
Compound Interest: Rs 101682
Simple Interest: Rs 100000
Interest saving: Rs 1682
2 crore on home loan
Loan amount: Rs 2 crores
Rate of interest: 8% per annum
Moratorium period: 6 months
Compound Interest: Rs 813452
Simple Interest: Rs 800000
Interest saving: Rs 13452
Note: Similarly, savings in the form of interest of the borrowers will be calculated according to the loan taken and other interest rate taken under other than housing loan. Here only information about interest savings. Tax savings will have to be reduced in net savings ..
What is lone moratorium?
Lockdown was announced across the country during the Corona Virus epidemic. In such a situation, the income of many people was affected. In view of this, the Reserve Bank gave the facility of loan moratorium. That is, the loan holders had the option to postpone the EMI to be paid every month on the loan. This facility was given for 6 months from March to August 2020.
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But those who had taken the moratorium of 3 months or 6 months, they were asked to pay interest for these periods on further interest. About which a petition was filed in the Supreme Court. It said that if interest is to be charged on interest then what is the benefit of providing the facility. This is a double whammy on loan holders. After hearing in court, the government announced an interest waiver on interest.
Source: www.financialexpress.com
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