RBI allows 3 month extension of loan EMI moratorium: Should you opt for it?


Giving more breathing room to borrowers repaying loans, the Reserve Bank of India (RBI) today announced an extension of the previously announced three-month loan EMI moratorium by another 3 months to August 31, 2020. The central bank, in March had announced a three-month EMI holiday from March 1, 2020, till May 31, 2020 on all term loan repayments like auto, home, personal loan EMIs and so on. 

This extension is especially a big relief for home loan borrowers facing a cash crunch due to the nationwide lockdown and its associated adverse financial impact on the economy. 

So, if you are a home loan borrower who opts to avail of the moratorium extension by 3 months and thereby take a total moratorium of six months, this is how it will impact your EMI schedule and total outgo on the loan amount. 

Repayment schedule 
If you opt for the moratorium extension, you need not pay the EMIs for 6 months i.e. March, April, May, June, July and August. However, this does not mean that the six months’ EMIs have been waived. It is only a grace period. You will have to continue paying the accrued interest on the loan EMIs (Equated monthly instalments) for these six months.