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Loan moratorium
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What Next As Loan Moratorium Ends And EMI Begins From September?

The supply of the second-hand car market is expected to increase after the EMI of vehicle loan starts as people will want to repay the loan by selling their car.

 

Mumbai| The loan moratorium period announced by Reserve Bank of India (RBI) is to end on 31 August. This is another major setback for the middle class due to wage cuts and loss of jobs due to Corona crisis. The banking sector does not want an extended moratorium period. In such a situation, the customers will have pay EMI from September 1.

The middle-class common man will be worst affected as the moratorium period ends. Due to the Corona crisis, strategic sectors like aviation, tourism, hospitality, malls, real estate are still not functioning to their potential. Millions of people working in these sectors have lost their jobs. At the same time, people have faced layoffs and pay cuts in other sectors. In such a situation, due to the burden of EMI, the financial troubles of a common man are expected to rise. In the case of non-repayment of EMIs, the property will be seized and auctioned by the bank.

MSMEs

The small and medium-size businesses will also face problems as soon as the moratorium ends. Many sectors are functioning only up to 50 per cent of their capacity. At the same time, areas like hotels, tourism, cinema are completely shut. The sectors which are also working are not able to make a profit due to the decrease in demand and customer footfall. In such a situation, it will be difficult for the industry to repay the EMI of the loan. The number of bankrupt in the industry may increase rapidly.

Gold loan Demand May See A Uptick:

After the loan EMI starts, the cash crisis is expected to increase among the common man. It is expected to be repaid through gold loans. This will increase the demand for gold loan in the coming days. The RBI has also allowed loans up to 90 per cent of the gold price till 31 March 2021. There will be an impact on the income of insurance companies. There is a possibility of delay or default in premium payments due to low income and commencement of loan EMI. This is expected to reduce the income of insurance companies in the coming days.

Second-hand car market:

Many people are preparing to sell cars after losing their jobs due to Corona crisis. The supply of the second-hand car market is expected to increase after the EMI of vehicle loan starts as people will want to repay the loan by selling their car. Due to this, there can be a big drop in the price of vehicles. This can also have an impact on the new car market.

Real-Estate:

Property experts say the price in the resale property market is likely to come down due to the end of the loan moratorium period. This is because people who may not be able to repay the EMI of the home loan will want to sell their property. This is likely to bring down prices in the resale market.

 

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