5 things to know about 3-month EMI moratorium
1. Three months moratorium on loans by RBI means that borrowers can skip their monthly instalments which are due from 1 March 2020 to 31 May 2020.
2. It includes all loans including home loan, personal loans, education loan, auto loan, working capital loan, credit card dues etc.
3. Interest is not waived off and will continue to accrue on the outstanding amount.
4. Borrower will have to pay additional interest for 3 months by either increasing the amount per instalment or number of instalments.
5. This deferment will not result in negative impact on credit score for individuals or credit downgrade or default for corporates.
All banks, on their websites, have laid stress on the fact that this is a three-month grace period and not a waiver; you will have to pay back after the moratorium period. As mentioned above, the interest on the EMIs will keep accruing during the moratorium period. Opting for the moratorium will mean that your loan tenure can get extended by a few months or your EMI amount would have to increase (after moratorium is over) to pay the additional interest.
Also, keep in mind that interest rates on debit card EMIs are on the higher side - about 14-16 per cent.
Do I need to inform bank, if I want moratorium or not?
No, you need not specifically inform Bank.
a) To avail the credit card moratorium, voluntarily defer paying the outstanding during this period. No Late Payment Fee or Auto Debit Return Charges would be charged during this period.
b) If you do not want to opt for moratorium then make payment as normal.
What is a Moratorium and what is the relief under RBI COVID 19 regulatory package?
Moratorium is a temporary postponement of payment of interest / principal / instalments. RBI has permitted Lenders to grant a moratorium on payment of Loan repayment instalments falling due between March 1, 2020 and May 31, 2020. However, interest on the Loan outstanding will keep getting levied for the deferred or moratorium period. If you opt for such moratorium, we will not present your repayment instrument during this period.Please note that the time is short to hold back some repayment instruments for the EMI due in April. In case the EMI gets cleared and you opt for moratorium, we will refund the EMI amount to you.
My financial position is not impacted and hence I do not intend to avail moratorium and want to continue to make the EMI Payment as in the past. Can I do so?
If your financial position is not impacted or you do not want to pay additional interest you do not need to do anything. Your EMI payment instrument will be presented as per schedule.We encourage customers with adequate funds to continue paying during this period to avoid the extra interest charges and tenor extension.
Does the moratorium cover both principal and interest?
Yes. It does. The complete EMI consisting of Principal and Interest part is eligible for deferment. Principal repayment is also eligible for deferment.
Is this a waiver of EMIs or a deferment of EMIs?
This is NOT A WAIVER, but a deferment. Interest on the Loan outstanding will keep getting levied for the deferred or moratorium period. You will need to pay the EMIs and the accrued interest as per revised repayment schedule.
Will my overdue before March 1, 2020 also get deferred if I avail the moratorium?
Deferment will not be available for overdue outstanding amounts as on February 29, 2020. The Instalment falling between March 1 2020 and May 31st 2020 can only be deferred. You are liable to pay the outstanding overdue prior to March 1, 2020 during the moratorium period also. Hence in case you have any overdue instalments and/ or other dues pertaining to the loan repayment prior to 1st March 2020, we request you to kindly pay such overdue instalments/ other amount overdue immediately, to avoid normal penal charges.
When will I have to pay the deferred EMIs?
You will need to pay the EMIs and the accrued interest at the end of the original loan period or as decided. Interest at the contracted rate shall continue to accrue on the outstanding portion of the loan during the deferment period. Such accrued interest shall be capitalized and a revised repayment schedule would be drawn up. The future EMI and / or balance tenure may be modified. You will see your revised schedule after the deferment period.Customers who have availed Consumer Durable Loans (CD Loans) to please note that if they opt for deferment, they would also be liable to pay interest for the deferment period at 23.5% p.a.
Does this moratorium affect my credit rating / CIBIL score?
The deferment of eligible EMIs will not impact the credit rating. In case you have any overdue instalments and/ or other dues pertaining to the loan repayment prior to 1st March 2020, we request you to kindly pay such overdue instalments/ other amount overdue immediately.