RBI COVID-19 relief package

RBI COVID-19 relief package - Example of loan

RBI has announced COVID-19 Moratorium relief package in order to provide some relief to Bank borrower . We have already discussed in details about COVID-19 Moratorium relief package in our earlier post COIVD-19 package

Today we are discussing it with an example and try to find out what effect we have , if we adopt this moratorium ?

We have taken the loan example as details shown below , lets have a look

Table 1

Principal Amount :	1000000
Number of Monthly Instalments :	60
Amount of Instalment :	20516.53
Interest Compounding :	Monthly
Interest Rate:	8.50%	p.a.

Month	Opening Balance	Interest Charged	Repayment	Balance
1	1000000.00	7083.33	20516.53	986566.80
2	986566.80	6988.18	20516.53	973038.45
3	973038.45	6892.36	20516.53	959414.28
4	959414.28	6795.85	20516.53	945693.60
5	945693.60	6698.66	20516.53	931875.73
6	931875.73	6600.79	20516.53	917959.99
7	917959.99	6502.22	20516.53	903945.68
8	903945.68	6402.95	20516.53	889832.10
9	889832.10	6302.98	20516.53	875618.55
10	875618.55	6202.30	20516.53	861304.32
11	861304.32	6100.91	20516.53	846888.70
12	846888.70	5998.79	20516.53	832370.96
13	832370.96	5895.96	20516.53	817750.39
14	817750.39	5792.40	20516.53	803026.26
15	803026.26	5688.10	20516.53	788197.83
16	788197.83	5583.07	20516.53	773264.37
17	773264.37	5477.29	20516.53	758225.13
18	758225.13	5370.76	20516.53	743079.36
19	743079.36	5263.48	20516.53	727826.31
20	727826.31	5155.44	20516.53	712465.22
21	712465.22	5046.63	20516.53	696995.32
22	696995.32	4937.05	20516.53	681415.84
23	681415.84	4826.70	20516.53	665726.01
24	665726.01	4715.56	20516.53	649925.04
25	649925.04	4603.64	20516.53	634012.15
26	634012.15	4490.92	20516.53	617986.54
27	617986.54	4377.40	20516.53	601847.41
28	601847.41	4263.09	20516.53	585593.97
29	585593.97	4147.96	20516.53	569225.40
30	569225.40	4032.01	20516.53	552740.88
31	552740.88	3915.25	20516.53	536139.60
32	536139.60	3797.66	20516.53	519420.73
33	519420.73	3679.23	20516.53	502583.43
34	502583.43	3559.97	20516.53	485626.87
35	485626.87	3439.86	20516.53	468550.20
36	468550.20	3318.90	20516.53	451352.57
37	451352.57	3197.08	20516.53	434033.12
38	434033.12	3074.40	20516.53	416590.99
39	416590.99	2950.85	20516.53	399025.31
40	399025.31	2826.43	20516.53	381335.21
41	381335.21	2701.12	20516.53	363519.80
42	363519.80	2574.93	20516.53	345578.20
43	345578.20	2447.85	20516.53	327509.52
44	327509.52	2319.86	20516.53	309312.85
45	309312.85	2190.97	20516.53	290987.29
46	290987.29	2061.16	20516.53	272531.92
47	272531.92	1930.43	20516.53	253945.82
48	253945.82	1798.78	20516.53	235228.07
49	235228.07	1666.20	20516.53	216377.74
50	216377.74	1532.68	20516.53	197393.89
51	197393.89	1398.21	20516.53	178275.57
52	178275.57	1262.79	20516.53	159021.83
53	159021.83	1126.40	20516.53	139631.70
54	139631.70	989.06	20516.53	120104.23
55	120104.23	850.74	20516.53	100438.44
56	100438.44	711.44	20516.53	80633.35
57	80633.35	571.15	20516.53	60687.97
58	60687.97	429.87	20516.53	40601.31
59	40601.31	287.59	20516.53	20372.37
60	20372.37	144.30	20516.53	0.14
	Total	230991.94	1230991.80

From the above if we repay our complete loan without defaulting any EMI or opting morotorium then the loan will be completed in 60 EMI with interest charge is Rs 230991.94

Now lets have a look , if we adopt three month morotorium after repaying 10 isntallment then amount outstanding after 3 month will be Rs 879706.78

Table 2

Principal Amount :	1000000
Number of Monthly Instalments :	60
Amount of Instalment :	20516.53
Interest Compounding :	Monthly
Interest Rate:	8.50%	p.a.

Month	Opening Balance	Interest Charged	Repayment	Balance
1	1000000.00	7083.33	20516.53	986566.80
2	986566.80	6988.18	20516.53	973038.45
3	973038.45	6892.36	20516.53	959414.28
4	959414.28	6795.85	20516.53	945693.60
5	945693.60	6698.66	20516.53	931875.73
6	931875.73	6600.79	20516.53	917959.99
7	917959.99	6502.22	20516.53	903945.68
8	903945.68	6402.95	20516.53	889832.10
9	889832.10	6302.98	20516.53	875618.55
10	875618.55	6202.30	20516.53	861304.32
11	861304.32	6100.91	0.00	867405.23	March
12	867405.23	6114.12	0.00	873519.35	April
13	873519.35	6187.43	0.00	879706.78	May

If we want to repay the outstanding amount after three month morortorium i.e. Rs Rs 879706.78 with amount of installment then we have the following chart

Table 3

Principal Amount :	879706.78
Number of Monthly Instalments :	52
Amount of Instalment :	20516.53
Interest Compounding :	Monthly
Interest Rate:	8.50%	p.a.

Month	Opening Balance	Interest Charged	Repayment	Balance
1	879706.78	6231.26	20516.53	865421.51
2	865421.51	6130.07	20516.53	851035.05
3	851035.05	6028.16	20516.53	836546.68
4	836546.68	5925.54	20516.53	821955.69
5	821955.69	5822.19	20516.53	807261.35
6	807261.35	5718.10	20516.53	792462.92
7	792462.92	5613.28	20516.53	777559.67
8	777559.67	5507.71	20516.53	762550.85
9	762550.85	5401.40	20516.53	747435.72
10	747435.72	5294.34	20516.53	732213.53
11	732213.53	5186.51	20516.53	716883.51
12	716883.51	5077.92	20516.53	701444.90
13	701444.90	4968.57	20516.53	685896.94
14	685896.94	4858.44	20516.53	670238.85
15	670238.85	4747.53	20516.53	654469.85
16	654469.85	4635.83	20516.53	638589.15
17	638589.15	4523.34	20516.53	622595.96
18	622595.96	4410.05	20516.53	606489.48
19	606489.48	4295.97	20516.53	590268.92
20	590268.92	4181.07	20516.53	573933.46
21	573933.46	4065.36	20516.53	557482.29
22	557482.29	3948.83	20516.53	540914.59
23	540914.59	3831.48	20516.53	524229.54
24	524229.54	3713.29	20516.53	507426.30
25	507426.30	3594.27	20516.53	490504.04
26	490504.04	3474.40	20516.53	473461.91
27	473461.91	3353.69	20516.53	456299.07
28	456299.07	3232.12	20516.53	439014.66
29	439014.66	3109.69	20516.53	421607.82
30	421607.82	2986.39	20516.53	404077.68
31	404077.68	2862.22	20516.53	386423.37
32	386423.37	2737.17	20516.53	368644.01
33	368644.01	2611.23	20516.53	350738.71
34	350738.71	2484.40	20516.53	332706.58
35	332706.58	2356.67	20516.53	314546.72
36	314546.72	2228.04	20516.53	296258.23
37	296258.23	2098.50	20516.53	277840.20
38	277840.20	1968.03	20516.53	259291.70
39	259291.70	1836.65	20516.53	240611.82
40	240611.82	1704.33	20516.53	221799.62
41	221799.62	1571.08	20516.53	202854.17
42	202854.17	1436.88	20516.53	183774.52
43	183774.52	1301.74	20516.53	164559.73
44	164559.73	1165.63	20516.53	145208.83
45	145208.83	1028.56	20516.53	125720.86
46	125720.86	890.52	20516.53	106094.85
47	106094.85	751.51	20516.53	86329.83
48	86329.83	611.50	20516.53	66424.80
49	66424.80	470.51	20516.53	46378.78
50	46378.78	328.52	20516.53	26190.77
51	26190.77	185.52	20516.53	5859.76
52	5859.76	41.51	5901.27	0.00
		172537.52	1052244.30

Comparing and concluding the above three table

Without Moratorium

Number of EMI =60
Amount of interest = 230991.94

With Moratorium

Number of EMI = 10 already paid as per table 2 + 52 emi as per table 3 to repay total outstanding after opting Moratorium = 62

Amount of interest = 10 installment already paid with interest Rs 66469.62 + total interest as per table 3 172537.52 =239007.14

Difference of EMI = 2
Difference of interest = 8015.20

So it is clear that if we adopt Moratorium then we have to pay 2 additional EMI with additional interest Rs 8015.20.We have taken only 1000000 example this difference can be bigger for bigger amount.

Think properly before adopting RBI COVID_19 relief package moratorium because it will bounce back to you only.

RBI COVID-19 relief package - Example of loan