Should I take 3-month extended moratorium advantage on loan EMI by August 2020?

Should I take 3-month extended moratorium advantage on loan EMI by August 2020?

RBI has now announced that the 3-month deferment on EMI of the loan has already been granted till August 2020. Many individuals have realized too late and may have realized that they have not used the debt EMI moratorium announced earlier in March last week. Due to Covid-19 many individuals have closed their offices, will not open their business, some have been lost, some employees get delayed in getting salary. Therefore, they were unable to pay their loan EMIs. Should you take advantage of RBI's 3-month extended moratorium on loan EMIs by August 2020? If you have availed before, should you continue availing for 3 more months?

What is the 3-month deferment on loan EMI?

India has been under lockdown due to corona virus condition since 2 months. Many of us may not be able to pay our outstanding debt EMI in the last 3 months and also for the coming 2-3 months because the situation has not calmed down yet. In view of this crisis, RBI has proposed that banks and financial institutions can provide 3 months deferment on the first loan EMI on March 27, 2020. In simple words, it is like postponding EMI payments, where you do not need to pay your monthly installments for the next 3 months. . People call it EMI Holiday (EMI moratorium).

However, they have granted this exemption from March 1 to May 31, 2020. By the time it was announced, 1 month had gone by already. Those who wanted to take advantage of this have in reality taken advantage for a period of 2 months.

3 months extended moratorium on Loan EMIs now?

RBI has indicated in its review meeting that earlier, it has announced this debt EMI relief till May 31, 2020 and has now been extended for 3 months and till August 31, 2020. This means that you are not required to pay your loan EMI by 31 August. 2020 if your bank or financial institution agrees on it.

What are the loans for RBI 3 months deferment on loan EMI?

RBI indicated that loans taken to purchase personal loans, home loans, auto loans (car loans, two wheeler loans etc.), education loans and consumer durables like AC, fridge, mobile phones will be covered within this 3 months. Moratorium.

Frequently Asked Questions (FAQs)

Now let us take a look at the frequently asked questions about this debt EMI relief extension till 31 August 2020.

Which banks and financial institutions are eligible to provide relief for this 3-month extension?

RBI indicated that all commercial banks, including regional, rural banks, small finance banks, cooperative banks and all NBFCs, including housing finance companies and micro finance enterprises, provide this extended relief to their customers for 3 more months. can do.

Which loans are eligible for additional 3 months of this EMI?

Specified loans taken on or before March 1, 2020 are eligible for this delay for a period of 3 months. Earlier it was in force from March 1 to May 31, 2020 and now it has been extended till August 31, 2020.

How do I know that I am eligible for a 3-month loan?

The RBI proposed this relief, although it is at the discretion of the bank or financial institution to provide a moratorium to its customers. Most banks have already announced that they are providing this relief. Now they need to communicate that they are also providing extension relief.

If my bank provides 3 months extended relief, am I automatically covered?

No, you do not come by this stretch of relief yourself. Most banks have already indicated that they are providing 3 months of relief. Second, they will communicate with you about this expansion now. Ideally, they should seek your confirmation for an extension of relief as some do not wish to opt for this extension of EMI moratorium. Third, you need to accept if you want relief from this 3-month moratorium extension. Fourth they will confirm after accepting your offer. We will update this section once we hear from major banks how they will proceed with this process.

If I choose the option of moratorium for 3 months, will it affect my CIBIL score?

No. The RBI clearly indicated that no credit score would be affected by this moratorium.

Will any extra interest be charged for this 3-month EMI moratorium?

If you have previously opted for EMI moratorium and wanted to extend for 3 months or now opt for loan EMI allocation for 3 months, your bank or financial institution will be able to avail this outstanding loan amount for a period of 3 or 6 months. Charge interest. Many banks indicated that they would extend the loan period to the extent of relief. If you have extended for 3 months, the tenure of the loan payment will be extended for 3 months. If you have previously extended it and carried it forward for 3 months, the total loan term of 6 months will be extended with the revised EMI schedule (outstanding + interest for moratorium period used to reclaim the revised EMI Will go)

Do I need to take advantage of RBI's 3-month extended moratorium on loan EMI by August 2020?

We have provided our point of view before and will be rebroadcast.

i) If you are a salaried employee or businessman and you are still able to receive un-interrupted fixed / regular monthly income, then continue to pay your EMI. EMI debt relief does not only mean that it has an EMI holiday(EMI moratorium), but it also means that you are just postponing your EMI and this will extend the term of your loan with additional interest.

ii) Can you pay your EMI with your emergency funds or investments without constraining your current expenses, then pay your EMI in the normal way.

iii) We are already seeing a lockdown for 2 months. If you feel that your income is going to be disrupted due to corona virus condition for the next 3 months, then you should opt for this 3 month extended loan EMI moratorium.

iv) Job cuts along the way. Now don't underestimate the situation in India. Millions of jobs have been cut in the last few weeks. If you get an indication that you will lose a job or understand that you may lose the job, then you can benefit from opposing this 3-month deferment so that you can join another job or make extra income Alternative ways can be found. However, you need to pay interest in your future EMI.

v) While the EMI of a home loan can be deferred, postponement of personal loan or credit card payments should be avoided. Interest on a credit card or on a personal loan is generally much higher than a home loan. Therefore, after this 3-month deferment, you will have to pay higher interest on such loans. Check if you can avoid them.