Will choosing six months moratorium on EMI benefit or pocket money?

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RBI has extended the repayment of EMI once again for three months. The big question is whether you will benefit in choosing Moratorium or we know about it, let us consider it.
  • RBI extended the repayment of EMI again for three months
  • No EMI to be paid till 31 August 2020
  • This step of RBI brought great relief to the bank’s borrowers
  • However, it affects your EMI schedule and loan repayment.

Priti Motiani, New Delhi: In
order to provide relief to the bank’s borrowers in the Corona virus crisis, the Reserve Bank of India ( RBI ) has extended the loan repayment EMI once again for three months, allowing them EMI till August 31, 2020 Will not have to pay. Earlier , in March, the RBI had extended the EMI Moratorium of several other loans including auto, home, personal for three months from March 1, 2020 to May 31, 2020.
This move by the RBI has brought great relief to those who are facing cash shortage due to the lockdown on Corona virus, as well as the adverse financial effects on the economy.



Therefore, if your home loan is outstanding and you want to take advantage of the morotorium period for some six months including this three months, then you should be aware of a few things, as it will affect your EMI schedule and repayment of loan amount is.

Repayment schedule
if you do not have to EMI then choose to exploit Moratoriam period to six Mahine- March, April, May, June, July and August K But this does not mean that you are exempted from paying these six months EMI. This is only the grace period. You will also have to pay interest on the EMI of the loan for these six months.



If you want Moratorium on EMI payments, you can get three options from the bank:
1. The total interest for these six months will be paid in a lump sum after the moratorium is over.
2.The total interest will be added to the outstanding loan and accordingly the increased EMI will have to be paid for the rest of the loan repayment period.
3. The interest that will form for the six months of moratorium will be added to the outstanding balance of the loan and EMI will be the same as before, but the repayment period will be extended.

Come, let’s understand this with an example. Suppose someone has taken a loan of Rs 30 lakh for a period of 20 years at the rate of 8%. He has to pay a total EMI of Rs 25,093.

NBT

If a borrower has taken a six-month moratorium, let us see what happens to the repayment schedule of the borrower in different scenarios.



If there is 5 years left in
repaying the home loan , if there is 5 years left in repaying the home loan, then interest of Rs 49,500 will be made for these six months EMI Moratorium.

1. If the borrower chooses the first option, he will have to pay a total interest of Rs 49,500 at the end of the moratorium.
2. However, if he opts for the second option, his new EMI in such a situation will be Rs 26,097, ie, the EMI will increase by Rs 1,004.
3. But if the borrower chooses not to change the EMI amount by extending the loan term, then the loan period will be increased by two months. If 10 years left to repay home loan


If the home loan repayment period is 10 years, then the total amount of interest for the six-month EMI moratorium will be Rs 82,728.



1. If the borrower chooses the first option, he will have to pay a total interest of Rs 82,728 at the end of the moratorium.
2. However, if he opts for the second option, his new EMI in such a situation will be Rs 26,097, ie, the EMI will increase by Rs 1,004.
3. But if the borrower chooses not to change the EMI amount by extending the loan term, it will increase for three months.

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If there is 15 years left in repaying the home loan,
if the period of repayment of the home loan is 15 years, then the total amount of interest for the six-month EMI Moratorium will be Rs 1.05 lakh.



1.If the borrower chooses the first option, he will have to pay a total of Rs 1.05 lakh interest at the end of the moratorium.
2. However, if he opts for the second option, his new EMI in such a situation will be Rs 26,097, ie, the EMI will increase by Rs 1,004.
3. But if the borrower chooses not to change the EMI amount by extending the loan term, it will increase for four months.

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