No EMI payments for six months as RBI extends moratorium on loans repayments till August 31

DWCRA women group leader paying their monthly loan installments at a bank during the nationwide lockdown in VijayawadaBCCL
  • Reserve Bank of India (RBI) governor has extended the moratorium for repaying terms loans by another three months.
  • This includes retail loans like those taken out for cars, home and education, along with corporate loans.
  • This means that the total amount of interest across these six months will only be due after the expiry of the deferment period on August 31.
RBI governor Shaktikanta Das announced some more relief for borrowers by extending the moratorium on loan repayments by another three months. Now they will have will August 31 to meet their repayment requirements.


“In view of the extension of the lockdown and continuing disruptions on account of COVID-19, the earlier measures are being further extended by another three months from 1 June till 31 August,” said Das.

This includes paying my loans across the board, including retail loans on cars, homes and education. “This will allow borrowers to manage their finance and manage their cash flow in a gradual manner,” he added.
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This brings the total moratorium periods to six months, from 1 March to 31 August. This means that the total about of interest across these six months will only be due after the expiry of the deferment period.


According to Das, this will help further ease the stress caused by coronavirus pandemic and the ongoing lockdown by providing relief on debt servicing and improving access to working capital.

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Under normal cicircumstances, the deferment of loan repayments has an impact on the borrower's credit history and risk classification. This can make it difficult to get other loans later on. However, with a moratorium in place, the borrower's credit rating will not be adversely impacted in any way. "The rate cuts combined with the further extension of loan moratoriums by 3 months up to August 31, 2020 augurs well for the real estate sector in the times to come," said Anuj Puri, Chairman of Anarock Property Consultants.

"Home loan interest rates have already gone down substantially over the last year, and are presently at an all-time low averaging between 7.15% to 7.8%," he added.

Most banks are not making the deferment automatic instead giving borrowers to choice to opt-in. While some have made the option available online, others will have to call up their banks in order to inform them that they wish to delay their repayment, especially in cases where the loan repayment is cut automatically from their associated account.

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Finance Minister Nirmala Sitharaman, in her slew of announcements last week, had provided indirect relief for the common man by deferring the filing of income tax returns till 30 November 2020.


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