12 EMI waiver by Axis, is it beneficial?

[Sudhaker]

Hi,

I received an email from Axis bank saying 12 EMIs will be waived off, when I asked the RM they say Bank will pay the 12 EMIs, is it true?



What could be terms and conditions for this and is this even beneficial?

 

[Skylar]

Hi,

I received an email from Axis bank saying 12 EMIs will be waived off, when I asked the RM they say Bank will pay the 12 EMIs, is it true?

View attachment 968

What could be terms and conditions for this and is this even beneficial?

Your 12 EMIs will be waived off. This benefit is offered through the waiver of the principal amount equivalent to 6 EMIs twice.

The first 6 EMIs are waived after 10 years (i.e., 120 months) from the date of the first disbursement.

The next 6 EMIs are waived off once you have completed 15 years (180 months) in the loan.

It’s important to note that only your last 6 or 12 (depending on how long you were on the loan) EMIs at the end of the loan tenure will be waived off.

Additionally, your EMI does not change as a result of the waiver; only the loan tenure is reduced after the waiver.

Let’s consider an example: Suppose you take a ₹20 lac loan at 8% interest for 20 years.
-Your EMI will be ₹16,729.
- Assuming the interest rate remains constant and no prepayments are made, after 10 years, you’ll get a waiver for 6 EMIs, reducing the total loan tenure to 19.5 years (remaining tenure: 9.5 years).
- After 15 years, you’ll receive another waiver of 6 EMIs, further reducing the total loan tenure to 19 years (remaining tenure: 4 years).

Catch is longer your EMI is the more money axis makes.
- If you close your loan in 5 years your total cost paid to bank with interest is 24lac
- If you close your loan in 10 years your total cost paid to bank with interest is 30lac
- If you close your loan in 15 years your total cost paid to bank with interest is 35lac
- If you close your loan in 20 years your total cost paid to bank with interest is 40lac
*These are rough figures for 20lac loan at 8% intrest