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Sunday, July 14, 2024

ജപ്തി വിരുദ്ധ ബിൽ

*ജപ്തി വിരുദ്ധ ബിൽ കേരള നിയമസഭ പാസ്സാക്കി : ആയിരങ്ങൾക്ക് ആശ്വാസംമുഖ്യമന്ത്രി പിണറായി വിജയൻ*

"ഭൂമിയും, വീടും ജപ്തി ചെയ്ത് ജനങ്ങളെ തെരുവിൽ തള്ളുന്ന നയം സർക്കാരിനില്ല. സർക്കാർ ജനങ്ങളെ ചേർത്ത് പിടിക്കും."



 കേരളത്തിലെ ആയിരക്കണക്കിന് കുടുംബങ്ങൾക്ക് ആശ്വാസം നൽകുന്ന ജപ്തി വിരുദ്ധ ബിൽ കേരള നിയമസഭ പാസ്സാക്കി. 1968 ലെ നിയമം ഭേദഗതി ചെയ്തു കൊണ്ടാണ് 2024 ലെ നികുതി വസൂലാക്കൽ (ഭേദഗതി ) ബിൽ ( The Kerala Taxation Laws (Amendment) Bill - 2024 )  കേരള നിയമസഭ ഒറ്റക്കെട്ടായി പാസാക്കിയത്.

*ഇനി കുടുംബങ്ങളെ തെരുവിലേക്ക് ഇറക്കി വിടാനാവില്ല*

കേരളത്തിലെ ഏതൊരു ബാങ്കിനും, ധനകാര്യ സ്ഥാപനത്തിനും, ഇതര വകുപ്പുകൾക്കും വീടും, സ്ഥലവും കെട്ടിടവും , വസ്തുവും ജപ്തി ചെയ്ത് കൊണ്ട് ഒരു കുടുംബത്തെയും തെരുവിൽ തള്ളുന്ന കണ്ണിൽ ചോരയില്ലാത്ത പ്രവർത്തി ഇനി മുതൽ ചെയ്യാൻ കഴിയില്ല.
കേരളത്തിലെ സഹകരണ ബാങ്കുകൾ, ദേശ സാത്കൃത ബാങ്കുകൾ, ഷെഡ്യൂൾഡ് ബാങ്കുകൾ, കൊമേയ്ഷ്യൽ ബാങ്കുകൾ തുടങ്ങിയവയുടെ എല്ലാ തരം ജപ്തി നടപടികളിലും കേരള സർക്കാരിന് ഇടപെടാൻ പൂർണ്ണ അധികാരം നൽകുന്ന ജപ്തി വിരുദ്ധ നിയമമാണ് നിയമസഭ പാസാക്കിയത്. 1968 ലെ 87 സെക്ഷനുകൾ അടങ്ങിയ നിയമമാണ് കേരള നിയമസഭ ഭേദഗതി ചെയ്തത്.

*Revenue Recovery Proceedings*

എല്ലാ തരം ജപ്തി നടപടികളിലും ഇടപെടാനും, സ്റ്റേ നൽകുവാനും, മൊറട്ടോറിയം പ്രഖ്യാപിക്കാനും സർക്കാരിന് പുതിയ ജപ്തി വിരുദ്ധ ബിൽ അധികാരവും, അവകാശവും നൽകുന്നുണ്ട്.
25000 രൂപ വരെ തഹസിൽദാർ, ഒരു ലക്ഷം രൂപ വരെ ജില്ലാ കളക്ടർ, അഞ്ച് ലക്ഷം രൂപ വരെ റവന്യൂ വകുപ്പ് മന്ത്രി, പത്ത് ലക്ഷം രൂപ വരെ ധന കാര്യ വകുപ്പ് മന്ത്രി, ഇരുപത് ലക്ഷം രൂപ വരെ കേരള മുഖ്യമന്ത്രി, ഇരുപത് ലക്ഷം രൂപക്ക് മുകളിൽ കേരള സർക്കാർ എന്നീ അധികാര കേന്ദ്രങ്ങൾക്ക് ജപ്തി നടപടികൾ തടയുവാനും, ഗഡുക്കൾ നൽകി സാവകാശം അനുവദിച്ചു നൽകാനും, ജപ്തി നടപടികളിൽ മൊറട്ടോറിയം പ്രഖ്യാപിക്കാനും സാധിക്കും.

*ജപ്തി വസ്തു ഉടമക്ക് വിൽക്കാം*

ജപ്തി ചെയ്ത വീട്, ഭൂമി, കെട്ടിടം, വസ്തു ഇനി മുതൽ ഉടമക്ക് വിൽക്കാം, ഉടമ മരിക്കുകയാണെങ്കിൽ അവകാശികൾക്ക് വിൽക്കാം.
ജപ്തി വസ്തുവിൻ്റെ ഉടമയും, വാങ്ങുന്ന ആളും നിശ്ചിത ഫോറത്തിൽ ജില്ലാ കളക്ടർക്ക് അപേക്ഷ നൽകണം. ഈ രീതിയിൽ നൽകുന്ന അപേക്ഷയിൽ ജപ്തി വസ്തു വിൽപന രജിസ്ട്രേഷൻ ജില്ലാ കളക്ടർ ചെയ്ത് നൽകണം. ജപ്തി വിരുദ്ധ ബിൽ വ്യവസ്ഥ ചെയ്യുന്നു.

*പലിശ കുറച്ച് നൽകണം*

12 ശതമാനം വരുന്ന പലിശ ഒൻപത് ശതമാനമായി കുറച്ച് നൽകാൻ ബിൽ വ്യവസ്ഥ ചെയ്യുന്നു.

*ജപ്തി ചെയ്ത വീട്, ഭൂമി, കെട്ടിടം , വസ്തു ഉടമക്ക് തിരിച്ച് എടുക്കാം*

ജപ്തി ചെയ്യപ്പെട്ട വീട്, ഭൂമി, കെട്ടിടം, വസ്തു ഉടമക്ക്, അവകാശികൾക്ക് തിരിച്ച് എടുക്കാൻ ജപ്തി വിരുദ്ധ ബിൽ വ്യവസ്ഥ ചെയ്യുന്നു. ജപ്തി വസ്തുവിൻ്റെ പണം ഗഡുക്കളായി നൽകി കൊണ്ട് വസ്തു തിരിച്ചെടുക്കാം.

*ജപ്തി വസ്തു ഒരു രൂപക്ക് സർക്കാരിന് ഏറ്റെടുത്ത് ഉടമക്ക് തിരിച്ച് നൽകാം*

ലേലത്തിൽ പോകാത്ത വീട്, ഭൂമി, കെട്ടിടം, വസ്തു (ബോട്ട് ഇൻ ലാൻ്റ്) ഒരു രൂപ പ്രതിഫലം നൽകി ജപ്തി വസ്തു സർക്കാരിന് ഏറ്റെടുക്കാൻ ജപ്തി വിരുദ്ധ ബിൽ സർക്കാരിന് അധികാരം നൽകുന്നു. ഈ വിധം ഏറ്റെടുക്കുന്ന ജപ്തി വസ്തു ഉടമക്കോ, ഉടമ മരിച്ചാൽ അവകാശികൾക്കോ സർക്കാർ അഞ്ച് വർഷത്തിനുള്ളിൽ തിരിച്ച് നൽകണം. പണം ഗഡുക്കളായി നൽകാൻ സാവകാശം നൽകുകയും വേണം.
അഞ്ച് വർഷത്തിനുള്ളിൽ ഇത്തരം ജപ്തി വസ്തു ഉടമക്ക് അല്ലാതെ  മറ്റൊരാൾക്കും സർക്കാർ കൈമാറ്റം ചെയ്യാൻ പാടില്ല. സർക്കാരിൻ്റെ പൊതു ആവശ്യങ്ങൾക്ക് ഈ വസ്തു ഏറ്റെടുക്കാൻ പാടില്ല. ഒരു തരത്തിലുമുള്ള രൂപ മാറ്റവും വസ്തുവിൽ  വരുത്താൻ ഒരിക്കലും  പാടില്ല. ജപ്തി വിരുദ്ധ നിയമം കർശനമായി അനുശാസിക്കുന്നു.

Monday, April 8, 2024

The ability of the Debt Recovery Tribunal (DRT) to take possession of wetland


The ability of the Debt Recovery Tribunal (DRT) to take possession of wetland for debt recovery depends on a few factors:

Land Classification:

Secured vs. Unsecured Debt:  If the wetland was offered as security for the loan (mortgaged), t potentially take possession  for recovery purposes.  However,  specific laws like the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) might have limitations  on agricultural land [SCCONLINE blog, Only a secured property used as agricultural land can be exempted under SARFAESI Act; Supreme Court sets aside Telangana High Court's order].

Agricultural Land Exemption:  Some states might exempt agricultural land from DRT possession under specific provisions. It's crucial to  check relevant state laws.

Overall Value and Utility:

The DRT's primary objective is to recover the debt. If the wetland has minimal commercial value due to its wet nature, the tribunal might prioritize selling more readily saleable assets to recover dues.

Debtor Objections:

The debtor can contest the DRT's decision to take possession of the wetland, especially if it qualifies for agricultural land exemption or has minimal value for debt recovery.

Availability of Judgments:

Unfortunately, there aren't readily available public judgments specific to DRT possession of wetlands.  However, judgments regarding  agricultural land exemptions under SARFAESI Act  might offer relevant insights.

Recommendation:

For a definitive answer on your specific situation, consulting a lawyer specializing in debt recovery  and land law is advisable. They can analyze the details of your case, including the loan type, land classification, and relevant state laws, to provide a more accurate assessment of the DRT's 

Sunday, January 30, 2022

What are the Consequences of Credit Card Defaulter

When you opt for a credit card, you sign up for various terms and conditions as laid out in the official joining documents by your bank/credit card issuer. One such condition states that you will pay all your credit card bills by the due date as listed on your credit card statement. If you fail to do so, your bank will send you warning/notices for 6 months on a regular basis.

Credit cards allow users to make purchases/transactions on credit, meaning that users can spend now and pay later. Banks/credit card issuing companies pay for your transactions for the time being and you have to repay the spent amount later. Now, when you fail to repay the spent amount in time (referred to as the credit card billing cycle), which comes to you as your credit card bill, you become a credit card defaulter.

Users become credit card defaulters when they fail to pay their credit card bills within the due time period for a long time. It is important to note that credit cardholders must also pay the minimum amount due. If the payment is not made for 6 months continuously, the credit card holder will be termed as a defaulter and his/her account will be immediately deactivated.

Well, even if you become a credit card defaulter, there is still some hope for you. To get back on track, you must bear the consequences of credit card defaulter and follow practices that will help you improve your credit score. This blog is a detailed guide for all this and much more. So, continue reading!

Reasons that can make you a Credit Card Defaulter

When you opt for a credit card, you sign up for various terms and conditions as laid out in the official joining documents by your bank/credit card issuer. One such condition states that you will pay all your credit card bills by the due date as listed on your credit card statement. If you fail to do so, your bank will send you warning/notices for 6 months on a regular basis.

Thursday, January 27, 2022

FOLLOWING PROCEDURE IS TO BE FOLLOWED FOR SHIFTING OF REGISTERED OFFICE UNDER SECTION 12(5) READ WITH RULE 27 OF THE COMPANIES (INCORPORATION) RULES, 2014

  1. Convene a Meeting of Board of Directors [As per section 173 & SS-1]
    • Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
    • Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
    • Hold a meeting of Board of Directors of the Company and pass the necessary Board Resolution
      • To consider the proposal of shifting of Registered Office of the Company outside the local limits of the city, town or village but within the same state and within the jurisdiction of same Registrar of Companies, subject to the approval of shareholders in the General Meeting or through Postal Ballot.
      • To fix day, date, time and venue for holding General Meeting of the Company.
      • To approve the draft notice of General Meeting or Postal Ballot along with explanatory statement annexed to the notice as per requirement of the Section 102 of the Companies Act, 2013.
      • To authorize the Director or Company Secretary to sign and issue notice of the General Meeting or Postal ballot and to do such acts, deeds and things as may be necessary to give effect to the Board’s decision.
      • To delegate authority to Company Secretary or any one director of the company to sign, certify and file the required form with Registrar of Companies and to do all such acts and deeds as may be necessary to give effect to the proposed shifting.
    • Listed Company shall submit the disclosure of Board Meeting within 24 hours from the conclusion of the Board Meeting and post the same on the website of the Company within 2 working days. [Regulation 30 & 46(3) of the SEBI (LODR) Regulations, 2015]
    • Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
  1. Obtain Shareholders’ Approval
    A. By Convening a General Meeting, OR
    B. By Passing a Resolution by Postal Ballot. [Refer the Procedure for Passing of a Resolution by Postal Ballot]

     

    Convene General Meeting: (Section 96, 100 and SS-2)

    • Notice of General Meeting shallbe given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.
    • Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
    • Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
    • Hold the General Meeting on fixed day and pass Special Resolution for change in the Registered Office of the Company and make relevant changes in the Memorandum of Association (MOA).
    • Listed Companies shall disclose the proceedings of General Meeting to the Stock Exchange within 24 hours from the conclusion of General Meeting and same shall be posted on the website of the company within 2 working days. [Regulation 30 and 46(3) of the SEBI (LODR) Regulations, 2015]
    • Listed Companies shall submit to the stock exchange the details of the voting results within two working days from the conclusion of the meeting and post the same on the website of the Company. [Regulation 44 of the SEBI (LODR) Regulations, 2015]
    • Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting].
  1. Obtain Shareholders’ Approval
    A. By Convening a General Meeting, OR
    B. By Passing a Resolution by Postal Ballot. [Refer the Procedure for Passing of a Resolution by Postal Ballot]

     

    Convene General Meeting: (Section 96, 100 and SS-2)

    • Notice of General Meeting shallbe given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.
    • Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
    • Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
    • Hold the General Meeting on fixed day and pass Special Resolution for change in the Registered Office of the Company and make relevant changes in the Memorandum of Association (MOA).
    • Listed Companies shall disclose the proceedings of General Meeting to the Stock Exchange within 24 hours from the conclusion of General Meeting and same shall be posted on the website of the company within 2 working days. [Regulation 30 and 46(3) of the SEBI (LODR) Regulations, 2015]
    • Listed Companies shall submit to the stock exchange the details of the voting results within two working days from the conclusion of the meeting and post the same on the website of the Company. [Regulation 44 of the SEBI (LODR) Regulations, 2015]
    • Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting].
  2. File Form INC-22 with ROC
    Within 30 days of passing of Special Resolution, file notice of change of situation of the registered office and verification thereof in E-Form INC-22 with the Registrar along with the prescribed fee as per Companies [(Registration Offices & Fee) Rules 2014 along with following documents

     

    • Certified true copy of Special Resolution with Explanatory Statement
    • Copy of Altered Memorandum of Association
    • Registered document of the title of the premises in the name of the company

      OR

      Notarized copy of lease / rent agreement in the name of the company along with a copy of rent paid receipt not older than 1 month

    • Authorization from the owner or authorized occupant of the premises along with proof of ownership or occupancy authorization to use the premises as registered office

      OR

      NOC from director, if registered office is owned by the Director and not taken on lease by the Company

    • Copy of utility service bill like telephone, gas, electricity, etc. depicting the address of the registered office, not older than 2 months
    • The list of all other companies with their CIN, having the same unit/tenement/premises as their registered office address.
  3. File Form MGT-14 with ROC
    File  Form MGT-14 with the ROC within 30 days of passing Special Resolution in General Meeting along with fee as specified in the Companies (Registration offices and fees) Rules, 2014 and with the following attachments
    • Certified True Copies of the Special Resolution passed along with Explanatory Statement.
    • Copy of the Notice of meeting sent to members along with all the annexure
    • Shorter Notice Consent Letters from the members in case the General Meeting was convened at shorter notice.
    • A printed copy of the Memorandum of Association and Article of Association
    • Copy of Attendance Sheet of General Meeting
    • Any other attachment as may be applicable.
  4. On the approval of E-Form MGT-14 and E-Form INC-22, Registrar will record the change of the situation of the Registered Office.
  5. Intimation to the Stock Exchanges [Regulation 30 and 46(3) of the SEBI (LODR) Regulation, 2015
    Every Listed Company shall inform the Stock Exchange (where the securities are listed) about the effective date of change of Registered Office of the Company within 24 hours from the registration of notice by ROC and the same shall be posted on the website of the Company within 2 working days.
  6. Compliances after Approval from ROC for Change of Registered Office
    Company shall undertake the following actions after receiving approval from ROC

     

    • Company may optionally issue a general notice by way of an advertisement in newspaper(s) informing all members and other stakeholders, about the change of situation of the registered office of the Company.
    • Amend the address of Registered office of the Company on outside of every office, building etc. in which its business is carried on, in a conspicuous position and in legible letters. [Section 12(3)(a)]
    • Substitute the address printed on all business letters, letter heads, Billheads, Invoice Forms, Receipt Forms and all other official publications. [Section 12(3)(c)]
    • Update new address of registered office with all the Banks where Company is operating Bank Accounts.
    • File application with Income Tax Authority for updating the address of the Company in PAN and TAN.
    • Update the new address of the Company with the Basic Utility Service providers like Electricity providers, Telephone Internet connections in the name of the Company etc.
    • Update new address of the Company with various govt. authorities like Central Excise Authorities, Customs Authorities, Sales Tax Authorities and Service tax Department etc.
    • Update the new address of the registered office with the NSDL, CDSL & RTA as applicable.
  7. File Necessary Amendment Application under following Acts
    • Goods and Services Act
    • Shops & Establishment Act
    • Factories Act
    • Foreign Exchange Management Act
    • Inter-State Migrant workmen Act
    • Private Security Agency Act
    • EPF
    • ESI
    • Other Labour Laws
    • Industry 

Thursday, September 9, 2021

How can you reduce the burden of education loan amid coronavirus pandemic?

The coronavirus pandemic has hit just about everyone in some way or the other. People have suffered pay cuts, many have been furloughed and countless more left unemployed. This has happened because the bottom lines of many companies have taken a beating since March of this year. Due to this household incomes have been thrown in disarray which has especially effected those repaying loans.

All kinds of borrowers are in trouble now. For students and recent graduates, repayment of education loans has become a problem because hiring has almost come to a standstill
If you are someone who is already servicing an education loan and are now finding it difficult to repay it, the first thing you should do is to contact your lender and ask them if your loan can be restructured.

In August 2020, the Reserve Bank of India (RBI) had allowed restructuring of loans without classifying them as NPAs to help companies and individuals manage the financial stress caused by the Covid 19 pandemic. And then in May 2021, due to the second wave of Covid-19, it announced a second resolution framework for many borrowers including individual borrowers.

As per the recent guidelines issued by RBI in May 2021, the resolution plan for personal loans (which includes education loans as per the apex bank's classification) may include conversion of any interest accrued/to be accrued into credit facility, rescheduling of payments and granting of the moratorium for maximum 2 years (including first restructuring) based on borrower's income stream assessment. The RBI has allowed lenders to modify the overall tenor of loan restructured accordingly. To be eligible for this restructuring the borrower should have made regular repayment till March 31, 2021. The last date for applying for the second loan restructuring is September 30, 2021.

Gaurav Aggarwal, Director, Unsecured Loans, Paisabazaar.com said, "The decision to choose from the loan restructuring options should be based on borrowers' repayment capacity and the additional interest cost incurred due to restructuring. Those expecting their cash flows to get restored within a few months should opt for the rescheduling of payments while those expecting income disruption to continue for a longer period should opt for the loan moratorium if offered."


How can you reduce the burden of education loan amid coronavirus pandemic?


Synopsis

For students and recent graduates, repayment of education loans has become a problem because hiring has almost come to a standstill. If you are finding it difficult to manage the repayment of your education loan, here is what you should  IST

The coronavirus pandemic has hit just about everyone in some way or the other. People have suffered pay cuts, many have been furloughed and countless more left unemployed. This has happened because the bottom lines of many companies have taken a beating since March of this year. Due to this household incomes have been thrown in disarray which has especially effected those repaying loans.

All kinds of borrowers are in trouble now. For students and recent graduates, repayment of education loans has become a problem because hiring has almost come to a standstill.



If you are finding it difficult to manage the repayment of your education loan, here is what you should do.


What can existing education loan borrowers do?
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If you are someone who is already servicing an education loan and are now finding it difficult to repay it, the first thing you should do is to contact your lender and ask them if your loan can be restructured.

In August 2020, the Reserve Bank of India (RBI) had allowed restructuring of loans without classifying them as NPAs to help companies and individuals manage the financial stress caused by the Covid 19 pandemic. And then in May 2021, due to the second wave of Covid-19, it announced a second resolution framework for many borrowers including individual borrowers.

As per the recent guidelines issued by RBI in May 2021, the resolution plan for personal loans (which includes education loans as per the apex bank's classification) may include conversion of any interest accrued/to be accrued into credit facility, rescheduling of payments and granting of the moratorium for maximum 2 years (including first restructuring) based on borrower's income stream assessment. The RBI has allowed lenders to modify the overall tenor of loan restructured accordingly. To be eligible for this restructuring the borrower should have made regular repayment till March 31, 2021. The last date for applying for the second loan restructuring is September 30, 2021.

Gaurav Aggarwal, Director, Unsecured Loans, Paisabazaar.com said, "The decision to choose from the loan restructuring options should be based on borrowers' repayment capacity and the additional interest cost incurred due to restructuring. Those expecting their cash flows to get restored within a few months should opt for the rescheduling of payments while those expecting income disruption to continue for a longer period should opt for the loan moratorium if offered."

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What can new education loan borrowers do?
1. Go for a collateral Loan

Most banks allow students to take education loans without collateral. However, you must know that opting for a secured loan with collateral can be a cheaper option.

Pranjal Kamra, CEO, Finology, a Raipur-based Fintech firm, said, "Many banks or financial institutions do not ask for collateral unless your education loan amount is very high. An education loan with collateral offers lower interest rate compared to the unsecured loans as the lender is not exposed to a high risk of default by the borrower. So, if you own any assets like land, property or FD, you can use it as collateral to apply for an education loan."

2. Pay interest during moratorium
Equated monthly instalments (EMIs) of education loan do not start immediately after the loan is disbursed. The borrower can start the loan repayment after the completion of the course or when he/she starts earning. This grace period is called a moratorium. Though the borrower is not required to pay the EMIs during the moratorium period, the lender charges interest (simple interest) which is added to the principal amount.

Kamra said, "Some banks may offer concessions (usually 1 per cent) on the overall interest rate if the borrower chooses to pay the interest amount during the moratorium period. Thus, it is advisable to pay the interest portion of the loan during the moratorium period to reduce the cost of repayment."



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How can you reduce the burden of education loan amid coronavirus pandemic?



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Most banks allow students to take education loans without collateral.

Synopsis

For students and recent graduates, repayment of education loans has become a problem because hiring has almost come to a standstill. If you are finding it difficult to manage the repayment of your education loan, here is what you should do.

The coronavirus pandemic has hit just about everyone in some way or the other. People have suffered pay cuts, many have been furloughed and countless more left unemployed. This has happened because the bottom lines of many companies have taken a beating since March of this year. Due to this household incomes have been thrown in disarray which has especially effected those repaying loans.

All kinds of borrowers are in trouble now. For students and recent graduates, repayment of education loans has become a problem because hiring has almost come to a standstill.

ADVERTISEMENT

If you are finding it difficult to manage the repayment of your education loan, here is what you should do.

What can existing education loan borrowers do?
ADVERTISEMENT
If you are someone who is already servicing an education loan and are now finding it difficult to repay it, the first thing you should do is to contact your lender and ask them if your loan can be restructured.

In August 2020, the Reserve Bank of India (RBI) had allowed restructuring of loans without classifying them as NPAs to help companies and individuals manage the financial stress caused by the Covid 19 pandemic. And then in May 2021, due to the second wave of Covid-19, it announced a second resolution framework for many borrowers including individual borrowers.


As per the recent guidelines issued by RBI in May 2021, the resolution plan for personal loans (which includes education loans as per the apex bank's classification) may include conversion of any interest accrued/to be accrued into credit facility, rescheduling of payments and granting of the moratorium for maximum 2 years (including first restructuring) based on borrower's income stream assessment. The RBI has allowed lenders to modify the overall tenor of loan restructured accordingly. To be eligible for this restructuring the borrower should have made regular repayment till March 31, 2021. The last date for applying for the second loan restructuring is September 30, 2021.

Gaurav Aggarwal, Director, Unsecured Loans, Paisabazaar.com said, "The decision to choose from the loan restructuring options should be based on borrowers' repayment capacity and the additional interest cost incurred due to restructuring. Those expecting their cash flows to get restored within a few months should opt for the rescheduling of payments while those expecting income disruption to continue for a longer period should opt for the loan moratorium if offered."

ADVERTISEMENT
What can new education loan borrowers do?
1. Go for a collateral Loan

Most banks allow students to take education loans without collateral. However, you must know that opting for a secured loan with collateral can be a cheaper option.

Pranjal Kamra, CEO, Finology, a Raipur-based Fintech firm, said, "Many banks or financial institutions do not ask for collateral unless your education loan amount is very high. An education loan with collateral offers lower interest rate compared to the unsecured loans as the lender is not exposed to a high risk of default by the borrower. So, if you own any assets like land, property or FD, you can use it as collateral to apply for an education loan."

2. Pay interest during moratorium
Equated monthly instalments (EMIs) of education loan do not start immediately after the loan is disbursed. The borrower can start the loan repayment after the completion of the course or when he/she starts earning. This grace period is called a moratorium. Though the borrower is not required to pay the EMIs during the moratorium period, the lender charges interest (simple interest) which is added to the principal amount.

Kamra said, "Some banks may offer concessions (usually 1 per cent) on the overall interest rate if the borrower chooses to pay the interest amount during the moratorium period. Thus, it is advisable to pay the interest portion of the loan during the moratorium period to reduce the cost 



3. Loan subsidy schemes
The central government and various state governments as well offer subsidy schemes to make educational loans more affordable.

Adhil Shetty, CEO, BankBazaar.com said, "For instance, the Ministry of Education offers subsidies to students belonging to the Economically Weaker Section (EWS) category. The eligibility criteria requires that the student's family's gross annual income not exceed Rs 4.5 lakh. The interest accrued on the loan during the course plus one-year moratorium will be paid by the Government of India."

4. Form a sensible repayment strategy
Normally, unsecured education loans are available for a period of up to eight years. On the other hand, secured education loans are available for a tenure of up to 10 years and more.

"Secured education loans are available for longer tenure - up to 10 years for loans up to Rs 7.5 lakh, and 15 years for a loan amount above Rs 7.5 lakh. Though longer tenure reduces the monthly EMI amount, it increases the overall repayment cost. Thus, it is always suggested to go for a shorter tenure. Also, prepayment of education loan does not carry any penalty, so you can repay the outstanding loan amount to save on interest cost," said Kamra.

5. Lenders may offer concessional rates for women, those studying in premier institutions
Shetty said, "Many lenders offer concessional rates to women. They also reserve their lowest rates for students going to premier institutions such as IITs and IIMs, or universities of national importance. The eligibility varies from one lender to another."

Point to note
If you apply for an education loan, then you are eligible for tax deduction under Section 80(E) of the Income-tax Act, 1961. The deduction can be claimed on the interest paid towards the education loan. However, you must know that the tax benefit can only be claimed by an individual who has taken the loan even if he/she is not the actual beneficiary.