RBI Moratorium: Will My Loan Installment Be Deducted Next Month?

The Reserve Bank of India today announced that there would be moratorium towards payment of term loans for the next three months due to the coronavirus pandemic. This means you would not be required to pay your Equated Monthly Installment (EMI) next month on a housing, gold, auto or any other personal loan.

Let's address some of the questions that may come to mind pertaining to the moratorium.

1. What are the type of loans that are covered?

All types of loans where you are paying an EMI are covered. These would include loan payments towards consumer durables, gold loans, home loans, personal loans, education loans etc.

2. What does the RBI guideline say?

The RBI has said, "All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) ("lending institutions") are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020.

3. Would this impact your credit score?

Your credit score would not be impacted because of the moratorium.

4. Would this mean that I have to pay a lesser amount by the end of the tenure?

It's important to note that because of the moratorium, your payment tenure gets increased by three months. This is only a deferment. What this means is that if your loan was to be completed in Dec 2020, it would now stand complete in March 2021, because of the moratorium.

5. Do I have an option of paying the amount?

There is no clarity on the same and you would need to contact your banker in case you want to honour your obligations for the next three months.

6. What about credit card outstanding payments?

The guideline clearly refers to "term loans" and hence you will have to make payments with regards to credit card outstandings.