Your Queries: 3-month moratorium on education loan; on gold loan also if EMI-based

April 14, 2020 2:00 AM

If you have a high credit score or work for an organisation that has a tie-up with a bank for subsidised interest rates, you can get a lower interest rate.

Usually, personal loans are allowed to be pre-paid after one year. Usually, personal loans are allowed to be pre-paid after one year.

By Chaitali Dutta

Will the loan moratorium apply to education and gold loans?
—Priyanka Sood
Education loans are extended as a term loan where the repayment is done by EMIs. Therefore, the three months moratorium is applicable to education loans as well. On the other hand, gold loans may be EMI-based or lump sum repayment at the end of tenure based. If your loan is the monthly repayment option, you will get the benefit.

I want to opt for the three-month moratorium for my housing loan. At present, outstanding is Rs 9 lakh which I have to pay in five years along with interest. The loan amount was Rs 30 lakh for 20 years. Should I opt for it and how much extra do I have to pay?
—Rishab Mehta
If your original loan was Rs 30 lakh, 15 years ago, the outstanding should have been around Rs 14 lakh now. I assume you have pre-paid additional amounts in the interim. If you continue to pay original EMI of around Rs 29,000, at the assumed rate of 8.5% today, your loan will get paid off in the next 36 months. If we look at the interest on Rs 9 lakh, for a month, it is about Rs 6,400. A three-month moratorium means your repayment will happen in 37 months instead of 36 months.

I want a personal loan of Rs 5 lakh. How can I bargain for a lower interest rate? Can I prepay after one year?
—R M Naik
If you have a high credit score or work for an organisation that has a tie-up with a bank for subsidised interest rates, you can get a lower interest rate. Usually, personal loans are allowed to be pre-paid after one year. If you have the funds, it is advisable to pay off the liability.

My home loan application was clear-ed by HDFC before the lockdown. But RBI reduced the repo rate last week. Will my interest rates also be lowered?
—S Raman
HDFC home loans of floating rates are pegged to RPLR (Retail Prime Lending Rate). So the reduction of the repo rate will not automatically reduce the RPLR. However, looking at the market and competition, HDFC Ltd may reduce its RPLR as well but not necessarily 75 bps. If you opted for a floating rate and HDFC reduces the rate, your applicable interest rate will also be reduced.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com).
Send your queries to fepersonalfinance@expressindia.com

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