RBI Update : EMIs for Loan has been extended for 3 months

The corona virus that started from China now has made its presence worldwide turning into a pandemic. With more than 10 lakh people falling prey to the virus and more than 55,000 deaths, the virus has become the biggest threat to humanity. The worst of it being experienced by, USA, Italy, China, South Korea, Iran, Japan and most parts of Europe, the virus is also expected to raise havoc in other countries. So far, more than 2,500 cases and 72 deaths have been reported in India. With the fast rise in confirmed cases, we can never be too careful.

India is now almost at the stage 3 of the pandemic, a community spread. With this, the rise in confirmed cases will amount to much more each day. To avoid the situation, Indian prime minister proposed a 21-day lockdown to contain the virus in the 2nd largest population in the world. The global impact of the virus is much dire. The virus will have a huge impact on the global economy which may even result in a recession. 

The RBI has come up with a temporary solution to avoid too much strain on the people. The RBI has decided to defer payments of term loans for next 3 months. 

• How will you benefit from it?

The 3-month relief of the loan payment will be applied on all term loans including cars, homes, corporate, personal and education. RBI governor Shaktikanta Das said, “All commercial banks including regional, rural and others are permitted to allow 3-month moratorium of payment of installments on all term loans as on outstanding as on march 1” on his official statement.

The 3-month moratorium means that the collective interest of those 3 months and monthly installments will be due after the expiry of the 3-month window. The use of this period will not affect negatively on a person’s credit score, so people with small businesses with unstable cash flows can avail the offer without any issues. 

• How can you avail the offer?

RBI has urged people with stable income and cash flow to pay the dues as usual in the time of crisis to keep the economy from degrading further. If you have the required balance your bank may debit the amount of your EMI as usual. If you do not wish for the amount to be debited, you are required to get in touch with your respective banks and let them know about the same. If your account lacks the required balance, your bank will not be debiting the amount for next 3 months.

• Should you be availing this offer?

In usual scenario, if you do not pay the dues for 3 months, your loan goes into NPA (non-performing asset) which can lead you to be a defaulter, destroy your CIBIL score and result in seizing of the property. With this new time window, you will be defaulted after 6 months instead of 3.

The plan is not as simple as it seems. In this 3-month of moratorium, you will also be billed the interest of extra 3 months if you wish to avail the offer. Which in turn, will raise your total payable amount. So if you have a steady cash-flow or salary it is advisable to pay your dues as usual.

In such tiring times, prevention is the best cure. We at MYNEWCAR urge everyone to stay home and be safe.

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