Many Non-Banking Financial Companies (NBFCs) in India offer personal loans to those who need urgent cash to meet their personal expenses. The interest rate charged by NBFCs on personal loans are competitive and range between 11.25% to 17.85% p.a.
Banks and NBFCs allowed to offer 3-month moratorium on term loans
The Reserve Bank of India has announced that all banks and Non-Banking Financial Companies (NBFCs) are allowed to offer a 3-month moratorium on all terms loans, including but not limited to personal loans, home loans, and education loans, for the payment of the Equated Monthly Instalments (EMI). This is for the outstanding as of 1 March 2020. This is applicable for all cooperative banks, rural banks, regional banks and NBFCs which include housing finance companies.
This moratorium will not impact the credit history of the beneficiaries. It will also have no impact on the lender’s asset classification. This is a part of the RBI’s measure to ease the impact of the Covid-19 pandemic which has led to a slow-down in the economy. Individual banks will have to allow EMIs to be suspended. If the bank has not specifically approved this, EMIs will still be automatically deducted from bank accounts.
Banks will have to discuss this at the board level and then intimate customers of the decision taken. The policy statement from the RBI mentions that personal loans, auto loans, home loans, education loans, and consumer durable loans are included in term loans, I.e., any loan that has a fixed repayment tenure.
For businesses, a deferment of interest payments for working capital loans has been allowed with outstanding as of 1 March 2020. The accumulated interest has to be paid after the deferment period expires. The moratorium or deferment will not be taken as a change in the terms and conditions of loan agreements.
|NBFC||Interest Rate (p.a.)||Loan Amount|
|Bajaj FinServ||12.99% onwards||Up to Rs.25 lakh|
|Tata Capital||11.25% onwards||Up to Rs.25 lakh|
|Mahindra Finance||As per Lender||Up to Rs.3 lakh|
|IIFL Finance||13% onwards||Up to Rs.25 lakh|
|HDB Financial Services||Upto 36%||Up to Rs.20 lakh|
|Shriram City Union Finance||Scheme based||-|
|Aditya Birla Capital||16.85% to 17.85%||Up to Rs.50 lakh|
|Processing Fees||Penal Interest||Foreclosure Charges||Part-prepayment Charges||Bounce Charges|
|Up to 3.99% of the loan amount||2% of EMI amount per month plus applicable taxes or Rs.200, whichever is higher||4% plus applicable taxes on principal outstanding||2% plus applicable taxes on part-payment amount paid||Rs.600 to Rs.1,200 per bounce|
|Processing Fee||Part Pre-payment Charges||Penal Interest||Foreclosure Charges||Cancellation Charges|
|Up to 2.5% of the loan amount plus GST||2.5% plus applicable GST||3% on overdue amount per month plus GST||4.5% of the principal outstanding at the time of foreclosure plus GST||2% of loan amount or Rs.5,750 plus GST|
|Loan Processing Charges||Penal Charges||Foreclosure Charges||Documentation Charges||Cheque Bounce Charges|
|Up to 2% of the loan amount plus GST||2% compounded monthly||Up to 6%||Nil||Rs.500 per bounce plus GST|
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