Guide to navigating through the RBI moratorium & extension
On March 27th 2020, the Reserve Bank of India (RBI) announced a moratorium on retail terms loans to relieve repayment pressures brought on by the disruptions caused by the COVID-19 pandemic. The RBI vide its notification dated May 23, 2020 (Moratorium Extension Notification) allowed lending institutions to extend the moratorium by an additional 3 months (i.e. until August 31, 2020) wherever necessary. This means that lending institutions can now extend the moratorium availed before May 31st, 2020, by another 3 months, wherever necessary.
For clarifications on the moratorium extension, please click here
What is a moratorium?
A moratorium is simply the temporary suspension or delay of an activity or practice. In this case, it basically means that, should your financial situation not allow you to pay, you have the option to defer/postpone payments for your loans with Nahar Credits.
Are you eligible?
Is this a waiver or a deferment of my EMI payments?
This is not a waiver, but a deferment. Your loan payments will be extended for the period of the moratorium, with interest accruing for the duration of the moratorium as per the guidelines announced by the RBI on 27th March, 2020.
Will the moratorium allow me to defer the entire amount, including interest and principal, or is there a minimum amount I will have to pay?
The moratorium will enable you to defer the entire amount payable – interest and principal – however, these will be due and payable again after the moratorium period comes to an end (i.e. May 31, 2020). According to the RBI circular, if the moratorium is availed, there will be additional interest charged at the same rate for the period that it is availed.
If I take a loan after 1st of March will I be eligible for a moratorium?
According to the RBI guidelines, any loan taken on or after the 1st of March may be eligible for the moratorium.
Will my loan payments be considered under moratorium by default or will I have to apply to defer my payments?
Your loan payments will not be deferred by default. If you would like to opt-in or out of the moratorium scheme, please send an email to firstname.lastname@example.org or reach out to our approved representatives/ agents. Afterwards, you will receive confirmation of your choice and your loan payments will be scheduled accordingly.
If you have any doubts or questions, please write to us at email@example.com
Will I be eligible for the moratorium in case of loss of job/pay cut during this period?
Yes, you will. We’re incredibly sorry to hear about your circumstances during this difficult time. If you would like to opt-in or out of the moratorium scheme, please send us an email at firstname.lastname@example.org.
What’s the application process?
How do I apply to defer my payments under the moratorium?
If you would like to opt-in or out of the moratorium scheme, please send us an email at email@example.com or reach out to our approved representatives/ agents.
Will your due date be the same?
Will my EMI due date change and, if so, what will be the new due date of my loan?
If your payments have been deferred, the original date of your loan payment wouldn’t change but the month will. Your installments will now become payable from June onwards. For example, if you opt to avail the moratorium in May for an installment that is due on May 5th, the new date will be June 5th.
Will my loan go into default?
No, it will not. Your payment due dates will simply be extended until May 31, 2020.
Will there be a late fee charged if I opt for the moratorium scheme?
No. As per RBI policy, no late fee will be charged for the duration of the moratorium.
What happens to your CIBIL score?
Will my CIBIL score be affected by this?
No, your credit score will not be affected by opting for the moratorium.
If my CIBIL score is affected negatively as a result of deferring my payment, who will take care of the correction?
The RBI has directed that your CIBIL score should not be affected by this. Should there be an error in your credit report or an impact on your CIBIL score as a result of deferring your payments, do let us know so we can work with the credit bureau to get this error corrected.
What about payments?
Will you continue to auto-debit the amount from my bank account using my NACH mandate till the 31st of May?
We (through our representatives/ agents) will be automatically debiting amounts due towards your loan unless you opt-in for the moratorium.
If you would like Nahar Credits to stop auto-debiting your EMI payments until May 31, 2020, please opt-in for the moratorium by sending an email to firstname.lastname@example.org or by reaching out to our representatives/ agents.
Will I be allowed to make payments during the moratorium period?
Yes, you will still be able to make your payments towards your loan during this time.
Do I have to pay all of my pending EMI payments in one-go after the moratorium?
As per RBI guideline, your interest will accrue during the moratorium. We will be collecting the entire accrued interest along with your first installment after the moratorium is over. After the first installment post moratorium, where we will collect your accrued interest, you will be able to make payment in monthly instalments as usual.
Will I be charged any penalty if I opt to defer my loan payment during this time?
No, you will not be charged any penalties or fees for deferring your payments under the moratorium scheme.
Will I be charged interest for the moratorium period?
Yes. As per the RBI’s guidelines, you will be charged interest during the moratorium. This interest will be accrued and collected along with the first EMI payment you make after the moratorium ends.
Will my interest be the same during the moratorium?
Your interest will continue to accrue at the same interest rate during the moratorium. Since deferring your payments results in an extension of your loan tenure, you will end up paying more money towards interest than you would have in the absence of a moratorium.
Does the moratorium alter any of the terms and conditions in my loan agreement?
Only the repayment schedule of your loan(s) will be altered to reflect the moratorium scheme. The tenor of your loan will be extended by the period of the moratorium availed by you. All other terms and conditions of your loan(s) remain the same.
Will there be any extra grace period given to make the EMI payments after May 31, 2020?
The moratorium is an RBI authorized extension to help people manage their finances in this difficult time. As per the RBI’s recent announcement, this moratorium period is currently until May 31, 2020. Unless the RBI, or any other relevant authority, issues further directions, there will be no further extension for making loan payments beyond May 31, 2020.