Govt Waives Off Interest On Loan Moratorium For These Loans: Eligibility, Rules, Duration
In a huge relief to retail borrowers and MSMEs, Govt has waived off interest on loan moratorium.
Which loans will be covered for this waiver? Who are eligible?
Keep reading to find out more!
Govt Will Not Impose Any Interest On Loan Moratorium
Due to the lockdown, and the slowdown, Govt had announced a loan moratorium of 6 months.
However, in case anyone opted for a loan moratorium, banks were allowed to charge additional interest on the EMIs being not paid.
Hence, for a loan of Rs 30 lakh, a EMI delay of 6 months meant paying Rs 11 lakh extra in interest.
Now, this won’t happen.
Govt has informed the Supreme Court that they are ready to waive off the interest on interest being charged under Loan Moratorium.
Note here, that Supreme Court had asked Govt to waive off this interest on loan moratorium several times, but Govt always insisted on charging interest.
Which Loans Will Be Eligible?
Loans upto Rs 2 crore will be eligible for this interest waiver.
Hence, this waiver of interest on loan moratorium will cover mainly small borrowers, and small and medium scale businesses.
All sorts of loans will be covered under this waiver:
Credit Card bills, home loan, educational loans, auto loans, personal loans and more.
Confirming this, a Govt source said, “This category of borrowers, in whose case the compound interest will be waived, would be MSME loans and personal loans up to Rs 2 crore of the following category — MSME loans, educational loans, housing loans, consumer durable loans, credit card dues, auto loans, personal loans to professionals and consumer loans,”
Loss For Banks?
This move to waive interest on loan moratorium will directly impact the banks, as they will lose the interest being charged.
As per sources, banks can incur losses upto Rs 6000 crore.
It seems that the Govt will help banks to recover this loss.
Besides, those who have paid installments during the lockdown, will be provided with some benefits as well.
More details are awaited