On August\n31st, the 6-month moratorium given by the Reserve Bank of India will end. This\nmoratorium was initially given for 3 months on repayment of loans. It then got\na second extension until 31st August 2020. <\/p>\n\n\n\n
This\nmoratorium gave a huge relief for customers that had lost their jobs and had to\nbear salary cuts. Due to loss of income, these people could not pay back their home loan EMIs<\/a>. The lockdown affected both; the common man and also\nthe whole country. <\/p>\n\n\n\n Can the\ncommon man bring down the interest on their loan interest rates?<\/strong><\/p>\n\n\n\n For those who\nhave no idea, the RBI has cut down repo rates by more than 200+ basis points. Home loan interest rates<\/a> have dropped from 9% to 7%. But there are people who\nare still repaying their home loan at 9%. You can approach your bank and switch\nto a lower interest rate on your home loan. This is possible by paying a small\nconversion fee. <\/p>\n\n\n\n How much\nmoney will the common man save by doing this?<\/strong><\/p>\n\n\n\n Here’s an\nexample for you to understand:<\/p>\n\n\n\n Home loan amount<\/a> – 30 lakhs<\/p>\n\n\n\n Loan tenure\nremaining – 15 years (180 months)<\/p>\n\n\n\n Interest rate\n– 8.5%<\/p>\n\n\n\n EMI amount –\n29,540<\/p>\n\n\n\n Now, if you\npay a conversion fee and reduce your interest rate to 7.4%, your new EMI amount\nwill be (29540-1900) = 27,640. If you continue paying this new EMI, your home\nloan tenure will reduce from 180 months to 160 months i.e. 20 months less.<\/p>\n\n\n\n Are there\nany additional security steps that you can take?<\/strong><\/p>\n\n\n\n As a common\nman in India, you must ensure to save money that can sustain your family for 6\nmonths at least. It’s not a great idea right now, to begin with, fixed deposits\nand recurring deposits as these give very low returns. Instead, you can use\nthis to repay your home loan EMI. Doing this will reduce your home loan EMI and\nalso reduce your loan tenure.<\/p>\n\n\n\n If RBI\nextends the moratorium period, should you go for it?<\/strong><\/p>\n\n\n\n We would like\nyou to know that each month you opt for the moratorium, the interest part of\nyour EMI will get added to the loan amount. Hence once the moratorium ends, you\nwill have to repay a higher monthly EMI. Hence it’s advisable that you don’t avail\nof the moratorium facility if you can afford to repay your loan EMI. <\/p>\n\n\n\n If you want to\napply for the best Home loan in India<\/a>, visit the Ruloans website and unlock the best deals\nand lowest interest rates on home loans.<\/p>\n","protected":false},"excerpt":{"rendered":" On August 31st, the 6-month moratorium given by the Reserve 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