To help alleviate some of the economic challenges and stress faced by people in the wake of the impact of the coronavirus on the Indian economy, the Reserve Bank of India announced a three-month moratorium on payments of Equated Monthly Instalments (EMI) on all term loans (which are any loans that have a fixed repayment tenure). This would include loans or credit card bills etc. However, banks have been addressing this issue in two different ways, with some banks automatically opting borrowers in for the moratorium while some others require the borrower to opt in.
Remember, while your credit score will not be affected negatively if you defer the EMIs, you will have to pay the interest for these three months once the moratorium period ends. Your Accrued interest will be added to the outstanding principal amount. So this can be paid back either by increasing your EMI amount and keeping the tenure the same or by increasing your loan tenure but keeping your EMI the same.
It is best do an analysis of the pros and cons for your individual financial situation before we decide whether to choose the EMI moratorium or not. Also the option of making a one-time payment in June of the accrued interest for the months of the EMI moratorium, which would be for the months of March, April, and May. After the RBI announced on REPO Rate cut many financial institutes reduced their rate of interest. Here we option to compare house loan and find the best provider to transfer home loan balance or just switch for a floating rate.
List of Automatic Loan EMI Moratorium Providers
The EMI moratorium is offered by both banks and Non-Banking Financial Companies (NBFCs) like the way banks offer pre-approved loans.
For the banks that are offering an automatic opt-in. So if you choose to continue paying your EMI during these three months, we would have to contact the bank and let them know.
- IDBI Bank
- IDFC First Bank: Automatic relief only for agricultural and rural customers
- ICICI Bank: Automatic relief for jewel loans, farm loans, business loans, and two-wheeler loans
- UCO Bank
- Central Bank of India
- Federal Bank: Automatic relief for business loans of up to Rs.5 crore, gold loan, micro lending, and agriculture loans.
- Punjab and Sind Bank
- Repco Home Finance
- Standard Chartered Bank
- Deutsche Bank
- Bank of India
- Axis Bank: Automatic relief for business loans,
- small business
- banking term loans,
- unsecured overdraft loans
- commercial vehicle loans,
- loans for construction equipment,
- gold loans,
- commodity loans,
- farmer loans,
- tractor loans,
- microfinance loans,
- KCC loans.
List of Lenders that Require Customer to Inform the Bank
- HSBC Bank
- Indiabulls Housing
- PNB Housing
- Bajaj Finserv
- Kotak Mahindra
- HDFC Bank
- Canara Bank
- State Bank of India
It is important to remember that an EMI moratorium. The one announced by the RBI is not a deferment of loan but a postponement of EMIs. This is useful for those who find themselves in really dire straits at this moment because of the economic crisis or recession facing them. It is to remember that you will be faced with either a higher EMI or a loan repayment tenure that is longer when the moratorium ends, depending on your loan amount and interest rate.
