Do I need to take advantage of RBI 3 month moratorium on loan EMI?

Do I need to take advantage of RBI 3 month moratorium on loan EMIDo I need to take advantage of RBI 3 month moratorium on loan EMI?


RBI has taken a few steps in its recent meeting to improve the Indian economy that has impacted due to the Covid-19 crisis. Among the various measures announced, 3 months moratorium on loan EMIs is a BIG step that would help many individuals who might not be able to pay Loan EMIs due to Indian economy lockdown. In this article, we would provide some of the frequently asked questions about RBI 3 month moratorium and indicate whether one need to take advantage of such deferment of loan EMIs.

Also Read: Should you exit mutual funds in this huge stock market crash?

What is RBI 3 month moratorium on Loan EMIs all about?


India is under lockdown due to corona virus situation. Many of us might not be able to pay our outstanding loan EMIs for next few months. Considering this crisis, RBI has proposed that banks and financial institutions can provide 3 months moratorium on loan EMIs. In simple terms, this is like deferment of EMI payments where you need not pay your monthly installments for next 3 months.

What loans are covered for RBI 3 month moratorium on Loan EMIs?


RBI indicated that term loans which include personal loans, home loans, auto loans (Car loans, two wheeler loans, etc.), education loans  and loans taken for purchasing consumer durables like ACs, fridge, mobile phones will be covered under this 3 month moratorium.

Frequently Asked Questions (FAQs)


Now let us look at some of the frequently asked questions on this loan EMI deferment.

1) Which bank and financial institution is eligible to provide this 3 months relief?

RBI indicated that all commercial banks, which includes regional rural banks, small finance banks, co-operative banks and all NBFCs which includes housing finance companies and micro finance enterprises can provide this relief to their customers.

2) What loans are eligible for this 3 month deferment of loan EMIs?

Specified loans that are taken on or prior to 1st March, 2020 are eligible for this deferment for the period of 3 months.

3) How do I know whether I am eligible for 3 month loan deferment?

RBI proposed this relief, however it is at the discretion of the bank or financial institution to provide a moratorium to its customers. They need to first discuss internally within the board of such bank or institution and then would be communicated to you. You need to wait for the communication from the bank.

4) If my bank provides 3 months relief, am I automatically covered?

No. You are not automatically covered. First bank would discuss internally. Second, they would communicate to you if you are eligible for such relief. Third, you need to accept if you want this 3 month moratorium. Fourth they would confirm once they accept your proposal.

5) If I opt for a 3 month moratorium, would it affect my Cibil Score?

No. RBI indicated clearly that due to this deferment, no credit score would get affected.

6) Is this 3 month deferment applies to credit card payments too?

Yes. Though initially there is no clarity, RBI has clarified. This 3 month deferment is also applicable for credit card payments too. Means you need not pay credit card dues for next 3 months provided your bank provides such relief and you accept such relief.

7) Would there be any interest charged for this 3 month period?

If you are opting for 3 months loan EMI deferment, your bank or financial institution WOULD charge interest for this 3 month period on the outstanding loan amount.

8) Would there be interest if I use this relief on credit card outstanding?

Yes, your bank would charge interest for this 3 month period at applicable rates.

9) What happens after this 3 month moratorium period?

Principal+interest whatever is due for this 3 month period needs to be paid immediately after this 3 months moratorium period.

10) Is there 3 months relief for business loans?

Businesses would have taken working capital loans for their day to day running the operations. They can defer the payment of interest on such loans for this 3 month period, which applies to all loans outstanding as on 1st March, 2020. This would not bring down the asset classification downgrade.

Also Read: Who would benefit from recent Repo Rate Cut and other measures from RBI?

Do I need to take advantage of RBI 3 month moratorium on loan EMI?


Here are few ways to handle this situation. One should note that you should be able to view this not just 3 months, but at least between 3 months to 6 months crisis.

i) If you are salaried employee or the businessman and you are still able to get fixed / regular income, then pay your EMIs in a regular way.

ii) Can you pay your EMI’s with your emergency money or investments without disrupting your existing expenses, then go head pay your EMIs in the normal way.

iii) If you feel that your income is going to be disrupted due to corona virus situation for next 3 months, you should opt for this 3 month moratorium.

iv) If you get an indication that you would lose a job or sense layoffs, opting for this 3 month moratorium can benefit you so that you can join another job or find alternative ways of paying off such dues. However, you need to pay interest + entire loan EMIs after 3 months period.

v) While home loan EMIs can be deferred, personal loans or credit card payment deferment should be avoided. Interest on credit card outstanding or on personal loans are generally very high compared home loan. Hence, after this 3 month moratorium, you would see huge interest to be paid on such loans. Check if you can avoid them.

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Suresh KP

Do I need to take advantage of RBI 3 month moratorium on loan EMI

Suresh KP
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89 comments

  • Kishore Gupta

    i have a home loan… paying 35500 per month.
    how much I will have to pay after this 3 months.

  • NISHANT AGRAWAL

    I’ve Hybrid Flexi Business Loan of Rs. 820000 with Bajaj Finserv and from this just used Rs. 495000 and they have freezed the remaining amount without prior information, which now I required to pay the salary of employee. Please suggest.

    • Nishant Agrawal

      Till date I’m paying the EMI on time without fail. Still they blocked the Loan account without prior information

  • Anish Abraham

    Sample this: All deposits have to be paid interest at all times. So if X’s deposit of rs100 is given to Y as a 1 yr-loan & Y is allowed to pay it off after 1yr3months, X has to be paid interest on her deposit for 15 months. So Y is charged interest on her loan for 15 months. . Please note the above is a classified tweet from Mrs Lata Venkatesh.

  • Anita Patil

    I geniuenly feel this is a sheer madness and an eye washer for common man.

    There only honorable PM announced we will get 3months relief from all types of EMI and then now you are putting a clause after 3months one has to pay these EMI together immediately.. How is that possible??

    Instead request the term is increases by the 3 months and no interest is charged. People are facing genuine crisis of funds.
    The govt needs to think of the common man and small business class too who are not sure if their business and job would survive after COViD 19 is over. The Govt should give a standing instructions to the bank to not force their clients to pay and extend the EMI term by the no of months one has not paid.

    It’s a humble request to the Honorable PM to rescue the common man from the burden of EMI for atleast 6monts to a year. So that one can survive and request the bank to extend the loan term. If big business men cannot survive and have announced pay cut of employees then how will the employees pay or a small business men and meet the ends in such. Situation.

    Please think consider and implement a bail out period for the common man who is always at the receiving end a suffers the most. Please honorable Modiji help us survive. No one wants to commit suicide all want to survive please please help us in this to. E of crisis.

  • Anilkumar

    Hello, my name is Anilkumar. Iam taking one mobile phone loan through bajaj finserv.this is applicable about 3 months moratorium.

    • Bajaj Finserv falls under NBFC and the loan you have taken is consumer loan. Hence these would fall under the purview. Pls reach out to bajaj finserve tpo check whether they are providing such relief. If yes, are there any charges and how they would collect the 3 months overdue (either they are extending the tenure of loan or we need to pay all dues after 3 months period)

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