Are there any Coronovirus specific insurance available in India?
Star Health and Allied Insurance had launched ‘Star Novel Coronovirus Insurance Policy’, a benefit policy to cover all those who test positive for the current pandemic COVID-19 (novel Coronovirus ) and require hospitalisation. The Star Novel Coronovirus policy is available under two sum insured options of Rs 21,000 and Rs 42,000 at premiums of Rs 459 plus GST and Rs 918 plus GST, respectively.
The Star Novel Coronovirus policy will provide a lump sum payment to any insured between age 18 years to 65 years, who is declared positive by a government accredited test and is hospitalised for the Coronovirus . Importantly, the policy does not have any international travel history-related exclusions.
Are Credit Card EMI waived off?
No. As per RBI Credit card dues won’t be a part of 3 month moratorium and it’s not part of term loan. 3-month moratorium will apply to corporate loans, home loans, education Loan, Personal Loans and car loans. Please remember that EMIs are not waived off- they are only deferred, which means you still have to pay, just got a grace period
How to get 3 month moratorium on home loans, education loan, personal loan and car loan?
Borrowers have to approach bank. In this scenario, the deferment will not be considered as default and banks will not have to make provision for non-performing assets. Please remember that EMIs are not waived off- they are only deferred, which means you still have to pay, just got a grace period. For the next three months, no EMI would be deducted from the account of anyone who has a loan outstanding. EMIs will resume after the moratorium period gets over.
Will my CIBIL Score be affected for EMIs Deferred?
No as per RBI, The 3-month moratorium will apply to corporate loans, home loans and car loans. Personal loans will also qualify for this and CIBIL score will not be affected. You must pay after 3 months and if not paid your CIBIL score will get affected.
Will my home loan EMI go down in future?
Yes. As per RBI interest rates cut by 75 basis to 4.4%. This means your home loan EMI may go down but this will happen only if the bank makes similar decision and revises interest rate. One must visit the bank and request them to revise the interest rate and then bank may reduce the EMI rate. Not all banks will reduce interest rate. Banks at their own discretion can decide on extent of reduction of EMI.
Don’t Opt for EMI Moratorium on loans?
RBI has announced 3 Months EMI Moratorium on loans which you must not opt as its extending your loan tenure rather than waiving off. For instance if your actual loan term is 60 months, after the RBI announcement, upon your request banks may increase the term to 63 months. This is not waiver of EMI but just deferment which can cost you more.
What is the implication of 3 months Moratorium on your loans?
As per Wikipedia, A moratorium is a delay of legal obligations or payment (debt moratorium). A legal official can order a delay of payment due to extenuating circumstances, which render one party incapable of paying another. During this current covid-19 lockdown many business and individual may have difficulty paying loans and to give relief to them, RBI has proposed 3 months Moratorium. In case you have opted for this, and are unable to pay the EMI then such repayment is not considered as default and will not affect your CIBIL score.
What are the financial institutions which can offer this Moratorium?
All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies) (“lending institutions”) are permitted to grant a moratorium of 3 months on payment of all installments.
What type of loans is eligible under 3 months EMI moratorium?
Term loans, including agriculture term loans and crop loans besides retail loans, are part of this moratorium. Retail loans are typically personal loans, home loans, auto loans, education loan and any loans that have a fixed tenure. They also include consumer durable loans, such as EMIs on air-conditioners, mobiles, fridge, and television.
Are credit card payments included in this 3 months EMI moratorium?
RBI has clarified on credit cards and said that 3 months EMI moratorium includes credit card too.
Are business loans covered under this 3 months EMI moratorium?
No. Only retail loans are covered under this 3 months EMI moratorium. Business loans are not eligible under 3 months EMI moratorium.
Which month EMIs are eligible under this moratorium scheme?
EMIs that are due from 1st March 2020 to 31st May 2020 are eligible for such moratorium.
How has to one opt for this moratorium scheme?
Banks may provide this moratorium on their own. However, as of now, it is clear this it is not a default option on all EMIs. You as a borrower have to approach the bank and opt for this moratorium by mentioning the reasons of difficulty in paying the EMI.
Does it make sense to opt for moratorium scheme?
No. Primary reason is you have to pay higher interest. Assume that you have Rs.60 lakh loan with 8% interest. Assume you opted for 3 months EMI moratorium, then during such moratorium period, banks will calculate the interest on this outstanding Rs.60 lakh at 8% and then total monthly interest works out to Rs.40, 000. Hence, if you opted for this 3 months moratorium, you have to additionally pay Rs.40, 000 interest on your outstanding just because you deferred your EMI.
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