The Government of Sri Lanka has offered loan relief through Banks and Leasing companies. Central Bank has shared given instructions to banks on how can get it and what relief they get.
The banks and leasing companies that allow you to delay payments will charge interest for the delay. This increased interest will be added to your monthly instalments.
Usually banks or leasing companies charge more interest at the start and more capital at the end.
For old leases and loans, most of your interest is already paid. Therefore, the interest added could increase your monthly payment. This increase won’t be much because the period of the loan or lease is also increased.
If you enter into a new lease agreement, the cost could be high due to:
How much did you get charged when first taking the lease? These charges are very low on personal loans.
For new leases and loans, taking the relief has only a small increase in monthly payment. Since the interest charged has not been collected yet, the increase to your monthly payment will be small.
Cash flow is the answer. If your income has reduced and you feel that paying loans or leases will be difficult, then check how long the benefit will be.
If yes, it is best to continue without the relief. This is because it increases the total cost of the money you borrowed.
If your cash flow will not be enough then you should take the relief.
See the article about how to use loan/ lease relief to build up a cash saving.
Many other countries such as India, Italy, United States of America are also giving loan relief.
Recently a similar relief system was offered to the Tourism industry after the Easter Sunday attacks. This was a blessing to the tourism industry to survive and reach 90% of arrivals by December 2019.