Take advantage of the moratorium period: Announcing major relief to home loan borrowers in the aftermath of the Covid-19, the RBI on March 27, 2020, deferred EMI payments under a three-month moratorium period apart from bringing down the repo rate to a record low of 4.4%. The Reserve Bank of India announced a major relief for home borrowers after Kovid-19, and on March 27, 2020, the EMI deferred payments for a period of three months, except for the reduction of the Remo rate by one month. The record low is 4.4%. Because the the moratorium is from March 1 to May 31, you have two months off.
However, take note of the many catches at this opportunity. First of all, this is not an EMI holiday – you have to pay EMI with interest later. Delayed payments in your credit history are not classified as a default link, but you have two months of relaxation from the Reserve Bank.
Additionally, whether the benefit extends to you is at the bank’s discretion as an invitation to your lender and as an interest charge for late EMI payments.
Suppose your home loan EMI is Rs 40,000. Up on non-payment, this amount will be added to the loan principal. In the next month, the interest will be computed on the loan outstanding, along with Rs 40,000.
For the borrower who has been laid off, not taking this option is not actually an option. “While availing of the moratorium will cost them additional interest cost, it will give them at least a two month window to get a job or arrange funds from other sources, without hurting their credit score,” says Chaudhary.
