Scope of Condonation
- Only penalties and surcharges are condoned.
- Principal and interest amounts are not condoned.
Calculation of Gross Loan Amount
- Includes outstanding principal balance.
- Includes unpaid interests, excluding surcharges and penalties.
- Includes service fees and salary loan redemption insurance (SLRI) costs.
Repayment Terms and Interest Rates
- Repayment period ranges from 2 to 4 years, at the borrower’s option.
- Interest rate fixed at 12% per annum.
- Interest computed on a declining balance basis of the restructured loan.
Computation of Monthly Installment
- Monthly Installment (MI) calculated as: MI = Monthly Installment Factor (nt) x (Gross Loan / 1000).
- Variables “n” and “t” represent term and duration from loan grant to first due date respectively.
Schedule for First Monthly Installment
- If restructuring approved on or before 10th of the month, due date is end of following month.
- If restructuring approved after 10th, due date is end of next following month.
Service Fee
- Fixed service fee of 1% charged on outstanding principal plus unpaid interests (excluding surcharges and penalties).
- Included in the gross loan amount.
Loan Redemption Insurance (LRI)
- All restructured loans covered by one-time premium for redemption insurance.
- Insurance benefit equals theoretical outstanding loan balance at borrower's death.
- Coverage terminates upon loan expiration, renewal, or full payment.
- Premium rates based on repayment period: 1.2% for 24 months, 1.6% for 36 months, 2.0% for 48 months.
- Loan amount basis for premium excludes surcharges and penalties.
Surcharge on Delayed Payments
- Surcharge set at 0.5% per month applied on delayed monthly installments.
Restrictions on Concurrent Loan Availment
- Members with restructured loans cannot avail regular salary loans concurrently.
Conditions for Loan Renewal
- Renewal allowed only after payment of six monthly installments.
- Renewal allowed if net proceeds are available.
- Renewal terms follow the regular salary loan conditions.
Management Reporting Requirement
- Management directed to report to the Board on delinquency extent and explanations.
- Ensures monitoring and control over salary loan repayments.