RBI’s Moratorium on Home Loans: Important Facts To Know

The COVID-19 pandemic has shattered the ‘normal’ we have been romanticising for decades now. The economy is severely hit and the results are not so welcoming especially for the people with no financial security. To give people some relief in these difficult times, the Reserve Bank of India has allowed a moratorium (when an activity is postponed for a certain amount of time, moratorium takes place) of three months on all kinds of loans including home loans. However, one can only avail this offer, if the payment of all term loans outstanding as on March 1, 2020, is being done. 

Below-mentioned is the list of facts you must know about RBI’s Moratorium on Home Loans. Have a look: 

  1. In this moratorium, borrowers are allowed to defer their EMI payments for three months. However, it must not be considered a complete waiver. In case, your repayments are due from March 01, 2020, to May 31 2020, your bank can give you the benefit of postponing it. However, a bank has a choice to exercise this 3-month moratorium.  
  2. The moratorium will be pertinent to the principal repayment as well as the interest repayment, meaning if you are paying EMIs for both principal and interest repayment, you will be allowed to avail the new 3-month moratorium on both. 
  3. If you are availing this moratorium, your credit score will remain unaffected. Moreover, no penalty will be charged. 
  4. If you have multiple loans on the trot, this moratorium will be applied to all of them. Although to get clarity on this, you must contact your respective banks. 
  5. If you are self-employed, you can take advantage of this moratorium by investing the amount that you will be save by not paying the EMIs related to your active loans in other relevant activities. 
  6. If you have taken a new home loan to purchase one of the best 2BHK flats in Thane or elsewhere, the 3-month moratorium will be applicable to you as well. It is advisable to take advantage of this offer if you are suffering the financial crunch owing to COVID-19 lockdown. 
  7. Every financial institution that lends loans including commercial banks, co-operative banks and Non-banking Financial Corporations can exercise this 3-month moratorium. 
  8. It is very crucial to note that this is only a deferment and not a complete loan waiver. 
  9. If you have already paid your EMI for the month of March, you can only defer your EMI repayment for the month of April and May. 
  10. The 3-month moratorium can also be availed by the Non-Resident Indians. 
  11. Whether you are salaried or self-employed, you can avail the benefits of this moratorium. However, individual banks are yet to give clarification regarding the eligibility criteria. 

It is important to note that home loan moratorium has not come into being as a novel concept just to fight the coronavirus crisis. Banks or lending institutions have been offering this kind of deferment for a variety of purposes in the past as well. 

If you are looking for some financial relaxation for your a home loan that you have availed to buy a 2BHK flat in Ghodbunder Road or a 3BHK flat in Thane a few months ago, you can forward with the newly announced 3-month moratorium after consulting with your lending institution. 

By Cole Harris

Sawyer Cole Harris: Sawyer, a DIY enthusiast, shares home project tutorials, woodworking tips, and creative ways to personalize your space.