Moratorium on Loans and CreditCard

          

 A Common Question today in everybody's mind is do I need to pay the Loan EMI or Not required?

    Here the word 'Moratorium' is popups in every news channels which refers to the EMI hold period or Moratorium on Loans. 

 What is Moratorium period?

 Moratorium means a period refers to the period of time during which you do not have to pay an EMI on the Loan Taken.  This is also know an EMI free period.

    This option is to help individuals facing temporary financial difficulties to plan their finance better.  Due to the Pandemic situation and huge financial issues due to Salary Cut or reduced pay many people want to hold their EMI Dues for few Months to manage the current problems.

    The Reserve Bank of India has announced an extension of Moratorium period for 3 months from June 01st 2020 to August 31 2020.  The first announcement was took place from March 01st to 31st May 2020.

    So this makes a six months in total of Moratorium on Loans EMI (Equated Monthly Installments) Starting from March 01st to 31st May 2020.  As said the latest news on extension of three months moratorium on repayment of term loan means the borrowers will not have to pay their Loan EMI Installments during such period as prescribed by RBI.

    This Moratorium period will provide relieve to many self employed and Low earnings people who found difficult to pay their Debts due for Car Loans, Home Loans, Personal Loans etc.

    Since the RBI has permitted all the Commercial Banks, Lending Institutions, Small Finance companies, Housing Finance Institutions to allow  3 Months further Moratorium from 1st June 2020 to 31st August 2020.

    Apparently, The repayment schedule and all subsequent due dates, Tenor for the Loans taken will also get shifted to another 3 months.  Which clearly means that after the said period banks may send the new schedule of repayment and further EMI to be paid.

    The Reserve Bank of India has further clarified this Moratorium or deferment is allowed to borrowers to specifically to manage the Covid 19 situation and the same will not be treated as any changes in the Terms and Conditions of the Loan agreement of the financial difficulties.

    RBI has also confirmed that due to this moratorium borrower's credit history will not get impact.  As per the debt servicing relief announced by RBI Interest shall continue to accrue on the outstanding portion of the Loan amount.

    Deferred installments under the moratorium will include the following payments falling effective 01st March 2020 to 31st August 2020 like Principle Interest components /  EMIs / Credit Card Dues.

Who Can avail Moratorium:

    Any One who has availed a Term Loan like Personal Loan, Home Loan, Credit Card EMIs can choose the Moratorium  option by contacting the respective Bank.

HOW Can approach for Moratorium  :

    Its really simple, All the Banks and Lending institutions have updated their website with the special information  and in that page option to choose the deferment period.

Moratorium Calculator:

    Please find the below few options to check the Moratorium Interest and EMI.  You can enter the current Loan outstanding value and interest to get the expected result.  Though the values are showing in the said sites, its is better to review the respective Banks terms and conditions and their updated payment schedule of equated monthly installments which may be sent to the borrowers.

Refund of EMI Interest:

Good News to all of us who paid EMI on time and also who availed a moratorium benefits.  Reserve Bank of India has announced recently to all banks stating that Banks should waive off the interest on interest for those who opted for Moratorium.

  The guild line also implies that a refund / cash back must be transferred to the borrowers who is not availed moratorium and paying loan EMI on Time.  

The cash back should be credited Before 5th November.  Question here is the cash back is to account of customer or. To the Loan account. 

 I will update soon on this.  Good News isn't it.   Leave your questions or comments in comment box if you know any new update.  

Ex Gratia. Cash back for Loan Interest.  Today I got email from bank saying some 900 rupees credit in my loan account.  Donut is confirmed that as per recent RBI guidelines. Banks started refunds to the borrowers loan account itself.  

1. FullertonIndia   2. ICICI BANK

Conclusion:

    Since the deferment period missing EMI payments may incur a additional burden in future one need to think if it is really required to choose the Moratorium period or not.

  It is far better to make the payments of equated monthly installments or the credit card minimum dues as per the earlier accepted terms and conditions.

    

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