Your questions – Loans: parent must pay IME on student loan if child cannot

The money in RBI Floating Rate Notes is owned by the issuer i.e. RBI. Banks are only distribution partners. Reimbursement will also come from the RBI.

By Chaitali Dutta

I took out a student loan for my daughter five years ago. She completed the course but did not find a job. Can I ask for a moratorium on interest until she gets a job?
—Praveen K. Madhavan
The responsibility is in double name. Therefore, if the child is unable to find employment after the course, the responsibility for payment rests with the co-holder, usually the parent, to pay for the IMEs.

I had taken out a home loan of Rs 22 lakh (7.1% interest rate) with overdraft facility. I prepaid Rs 20 lakh. Now I need car loan of Rs 15 lakh. Should I take out a car loan or use the overdraft facility to pay for the car?
— Name hidden
Looking at the interest rate on the home loan and a car loan, the latter would be an expensive loan. So use your home loan money and buy the car straight away, without taking out a higher interest rate loan for a depreciating asset.

I booked an apartment in 2016 when RERA did not exist. In 2018, the manufacturer received a notice of non-registration with RERA. As the project has not advanced, the builder says it will return the money. Can I complain about my interest in RERA?
—Abha Kirty
Yes, you can claim interest on this amount provided that a clause to this effect was included in the initial arrangement. However, the appropriate body for such a complaint would be the Consumer Forum/Department of Consumer Affairs: Grievances Against Misleading Advertisements (GAMA) portal. Based on the amount in question, the complaint should be filed with the district/state/national forum.

What happens to RBI Floating Rate Notes managed by private and public sector banks, when a bank fails?
—Prakash Ramachandran
The money in RBI Floating Rate Notes is owned by the issuer i.e. RBI. Banks are only distribution partners. Reimbursement will also come from the RBI. In the event of insolvency of the distributing bank, your investment will not be at risk. The only thing that can happen is that RBI asks for alternative bank account details, to pay the interest as well as the maturity proceeds.

The author is the founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your questions to [email protected]

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