Loan moratorium is a solution that has helped many struggling customers to manage all their loan repayments. Yes, this solution was passed by the RBI as of March 1st and is supposed to end on 31st August 2020.

But what happens post moratorium period ends?

You will start repaying your monthly loan EMI as you used to do earlier. This time, you will have to pay an interest amount extra (for all moratorium months).

What if I cannot repay my loan EMI post moratorium period?

Well, this will not be good for your credit score. You will struggle with Banks as non-payment of EMIs is equal to being a defaulter in the eyes of the lender. And defaulters have a tough time getting any new loan approved in the future.

What if RBI extends moratorium until 31st December 2020?

This will give you an additional period of 4 months where you don’t need to repay loan EMI. But the downside to this solution is that an interest amount will be charged for each month you opt for the moratorium. This is over and above all EMI that you pay.

What do you suggest regarding loan moratorium being extended?

Ruloans believes that it is a good idea to opt for moratorium only when you are not earning any income and absolutely have no extra savings. But if you are earning and can manage your household expenses, we suggest that you start repaying your loan EMI. This will help you reduce your loan burden and save you from repaying extra interest money.

But why should a customer not take the benefits of the moratorium period?

There is no such benefit of this moratorium except for those who are not earning any income. Your loan EMI will increase and so does the tenure. This means you will be paying your EMIs for a longer tenure than before.

Hence as much as possible pay whatever you can as loan EMI. If you wish for another solution, look for loan restructuring. This solution is best as you can discuss with the Bank and change your loan repayment terms. Through this, tenure will increase, and loan EMI will decrease. Isn’t that a good deal?

Please do plan well in advance and make a sound decision as loan repayments can take a long time to complete. As always, if you wish to find the best deals on home loans or lowest interest rates on home loan balance transfer in India, visit our website and APPLY HERE.