Good News And Big Relief: RBI Extends EMI For Another Three Months

EMI (2)

The Reserve Bank of India announced an extension of the mortarium of loans up by three months. As per the announcement earlier, the moratorium was supposed to end on the 31st of May. With the new announcement, the moratorium is extended to 31st of August.

With this, the total moratorium period is stretched to six months starting from March. This means that people who have availed term loans need not pay the installments during the moratorium period. The extension would provide relief to people as the economic situation in the country hasn’t been improved. This would also benefit the self-employed who have lost work or are struggling to get work due to the pandemic. This would apply to personal loans, car loans, and home loans, etc.


Moratorium period refers to a period of time where one would not have to necessarily pay an EMI to the loan availed from the Bank. It is often referred to as an EMI holiday. It is often incorporated specifically to an individual when the financial crisis hits the individual and the moratorium would help the individual to plan his finances better.

Courtesy: Livemint

However, as per the debt relief policy by the Reserve Bank of India, the interest on loans shall continue to accrue on the outstanding portion of the loans even during the moratorium period. The payments that will be deferred in the moratorium period are the principal or interest components, bullet repayments, equated monthly installments, and credit card payments. The payments due from March 1st to August 31st will be covered in the relief.

Credit Score will not be affected

If a person avails the moratorium, according to the RBI’s statement on the EMI relief moratorium, the credit ratings and grades of the person is unlikely to be affected. This will also not affect the risk of the calculation of the loan. If your loan has been subjected to changes regarding the moratorium policy, then the extension would apply depending on the changes adopted by the lending institution.


Under normal conditions, failing to repay installments in time would lead to a downgrading of the credit rating of the person. However, in the moratorium period, the credit rating system will not be impacted whatsoever, Reserve Bank of India clarified.

Source: The Economic Times