When the loan moratorium was announced, people thought it was a miracle. Now they don’t need to repay the loan EMI until 3-6 months.
While the world was rejoicing, the news came out that anyone who opted for the moratorium doesn’t need to repay the loan EMI but the interest component will be charged. This means you will be charged “Interest on Interest amount of your loan EMI”.
The good news turned into bad news and people became helpless. Because of the pandemic, they either lost their jobs or lost their source of income. The moratorium period was extended up to 6 months. Now, post 6 months, you are expected to repay your loan EMI as you used to and also repay the extra interest amount.
Seeing this situation, the Supreme Court directed the Central Government and the Banks to ensure the interest money is given back to the customers before Diwali. Yes, that extra money will be given back to you before Diwali. Isn’t that great news?
Here are certain things you need to know about this decision:
- ■ Loans up to 2 crore rupees will only be covered.
- ■ Lenders will have to credit the amount to customer’s account before November 5th, 2020.
- ■ This benefit applies to the following products – MSMEs, education loans, home loans, and consumer durable loans, credit card pending dues, car loans, personal loans, and professional loans.
- ■ Banks that fall under this decision – Private and Public sector banks, Co-operative banks, Regional Rural Bank, NBFC, etc.
Steps through which Banks will credit the “Interest on Interest” amount during loan moratorium:
- ■ The difference that’s between the compound interest and simple interest in the eligible borrower’s account from March 1, 2020, to August 31, 2020, will be credited.
- ■ Also, the cashback amount must be offered to all loan customers. It doesn’t matter if the customer applied for a full moratorium, half moratorium, or even those who did not apply for the moratorium.
- ■ After the Banks and other lenders have credited the amount in the customer’s account, they can claim the amount as reimbursement from the Government of India. This amount will be flown through the nodal agency i.e. the State Bank of India.
We hope this great news brings happiness back to your lives this Diwali. Ruloans team wishes you all a Happy Diwali 2020 in Advance.