banner banner

Stay Up-to-Date with Our Blogs & Articles

The texts on this website have been translated using an automated translation tool and its accuracy cannot be guaranteed. We recommend referring to the English version of the content for the most precise information. In the event of any disputes or inconsistencies, the contents in the English language shall be considered final and binding. IIFL HFL disclaims any liability or responsibility in this matter.
Go Back to Main blog page

Key Things to Know About RBI's Extended Moratorium on EMI

By IIFL Home Loans | Published On May 27 2020 1:00 PM 2 min read 69 views 2001 Likes
Key Things to Know About RBI's Extended Moratorium on EMI

Planning to avail loan moratorium extended by another 3 months by RBI Check out six of the most important things about this moratorium before deciding.

On 22nd May 2020, the RBI asked all the lending institutions in India to extend moratorium on loan EMIs by another three months to help retail borrowers who are financially struggling due to the COVID-19 outbreak. The moratorium is also available on credit card dues.

Lenders have now started implementing this moratorium facility. Most institutions are requesting their customers to visit their website to apply for this facility. If you are planning to apply as well, it is necessary for you to first thoroughly understand moratorium.

Here are six things borrowers should know about this 6-month loan EMI moratorium-

1. Types of Loan Eligible for Moratorium

As per the official announcement by the RBI, the moratorium facility is available for all the different types of term loans.

This means that it applies to retails loans such as home loans, auto loans, personal loans, and even agricultural term loans and crop loans. Even commercial loans like working capital loans are eligible for this moratorium.

2. Moratorium Period

6-month moratorium is available for EMI payments between 1st March 2020 and 31st August, 2020. Borrowers can apply for this moratorium facility to defer their EMI principal + interest payments during this period.

Regular payments would resume from September 2020. But borrowers should understand that the moratorium only defers the EMI payment and is not a waiver or concession.

3. Interest Accrual

Even during the moratorium period, the balance loan amount will continue to accrue interest. This will increase the total interest a borrower pays on his/her loan. We recommend you only apply for it in case of severe financial constraints.

The RBI has also reduced the repo rates. Lenders will mostly reduce the interest rate on repo-rate linked loans soon. This will help in reducing the loan EMIs. If possible, try and continue paying the EMIs so that you are not required to pay additional interest.

4. Collection of Accrued Interest

The RBI has not made any announcements about the collection of accrued interest. So, the lenders have some flexibility with regards to how they'd implement the moratorium and collect accrued interest

While most lenders are yet to decide, it is expected that the accrued interest will be recovered by increasing the loan tenure. However, in some cases, where the tenure cannot be increased, the EMI may be increased to adjust the accrued interest.

5. Moratorium Application Process

If you'd like to apply for this moratorium facility, please raise a request here, You are required to fill your account number to take your application forward.

Note that all the borrowers who do not apply for the moratorium will continue paying the EMIs.

6. Refund of EMI Paid in March

You may raise your request at for the same.

India Fights COVID-19

The loan EMI moratorium was a much-needed relief measure for retail borrowers struggling with the economic impact of COVID-19 pandemic. Apply for this facility as soon as possible in case if you believe that you won't be able to pay your EMIs temporarily.

But do so only in case of severe financial distress as the moratorium can significantly increase the interest outflow of your loan. Do consult your lender before deciding.


apply loan

Quick and Hassle Free Loan Processing

green ad
Prelude to Building Green - IIFL Home Loan's Guide to Sustainable Affordable Housing
Download report

Disclaimer: The information contained in this post is for general information purposes only. IIFL Home Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment, etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness, or of the results, etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Given the changing nature of laws, rules, and regulations, there may be delays, omissions, or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan product specifications and information that may be stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan.