Moratorium

HDFC Bank has announced an extension of the moratorium on loans to 31 August, 2020. You can avail loan moratorium up to 6 EMIs due from 1 March, 2020 and 31 August, 2020. If you take up the moratorium you wouldn’t have to pay your EMIs between the moratorium period given.

Taking up the EMI moratorium is not a loan waiver of any kind. It is an EMI holiday where you wouldn’t have to pay your EMIs for a specified period of time.

A normal EMI calculator returns the EMI on a specific loan amount, rate of interest and tenure. Whereas a moratorium calculator returns the increase in EMI, interest or tenure on a particular loan balance amount, interest rate and the set loan tenure.

No, opting for the moratorium/repayment holiday will not impact your credit score and if you don’t make payments during that time it won’t be reported to the credit bureau. However, if you fail to make payments after the moratorium gets over, your credit score will take a hit.

Financial institutions are allowed to permit 3 month repayment holiday on interest with respect to working capital facilities that fall due between March 1,2020 and May 31,2020. The accumulated interest will have to be paid immediately after the repayment holiday/moratorium gets over.

The process of opting for the moratorium might differ from bank to bank. Ever since RBI had announced the repayment holiday, banks have followed suit on announcing details of the loan EMI holiday on their respective websites.

The Reserve Bank of India has permitted banks and other financial institutions to allow postponement of EMIs for 3 months starting from March 1,2020 to May 31,2020. The borrower would have to request the bank and show that his/her finances have been affected due to the coronavirus disruption to avail the EMI holiday.