In an effort to minimize the financial effects resulting from COVID-19 related health crisis and the lockdown, RBI has permitted all banks and financial institutions of India to offer their customers a 3-month moratorium on all term loans, including personal loans. As per RBI’s directive, Bank of India has provided its personal loan account holders the option to opt for a moratorium of up to 3 months on installments/EMI payments due between 1st March, 2020 to 31st May, 2020. In the following sections, key details related to Bank of India Personal Loan Moratorium such as the ways to opt for the moratorium, eligibility criteria, etc. are explained in detail.
What does the Bank of India Personal Loan Moratorium mean?
In accordance with RBI’s directive, Bank of India has provided customers the option to avail a 3-month moratorium on all term loans, including personal loans. The moratorium legally permits the borrowers to defer their personal loan EMI payments for the next 3 months with due dates falling between 1st March, 2020 and 31st May, 2020. This deferment is neither penalized nor chargeable and allows borrowers to extend their original repayment tenure by 3 months. However, the interest shall keep accruing during this period.
COVID-19 Relief Measures from Bank of India
Opting for EMI Moratorium on your Bank of India personal loan is voluntary. However, Bank of India has a default ‘opt-in’ where all eligible term loan account holders are offered automatic relief from servicing their loan EMIs. In case borrowers wish to opt out and continue paying their personal loan EMIs as usual, they need to get in touch with the bank. If they choose to avail EMI Moratorium on their Bank of India personal loan, Bank of India offers the following relief measures:
- Borrowers can defer their Bank of India personal loan EMI payments (including the principal and interest) till 31st May, 2020.
- Interest shall keep accruing throughout the moratorium at the contracted interest rate of the loan.
- The personal loan repayment tenure would also get extended by the corresponding period for which you have availed the moratorium. For instance, if you have paid your personal loan EMI for the month of March and opted for a moratorium for April and May 2020, your original loan repayment tenure would be extended by 2 months.
Eligibility for Personal Loan EMI Moratorium
The following are key eligibility criteria for loan moratorium:
- All term loans outstanding as on 1st March, 2020 including Bank of India personal loans, are eligible to avail the relaxation.
- Automatic relief to all such term loan account holders is being provided to eligible borrowers. In case they wish to opt out and want to continue paying their loan EMIs as usual, they can get in touch with the bank.
- Loans that have EMIs that were overdue prior to Feb 29, 2020 will be treated under applicable NPA (non-performing asset) norms.
The example below illustrates the impact on your loan payment amount in case you opt for a moratorium on your Bank of India personal loan. Let us assume you have an outstanding loan amount of Rs. 2 lakh at 13% p.a. interest rate with an outstanding loan tenure of 3 years at the time of the loan moratorium:
1. If you do not opt for the moratorium:
|Total interest payable for 3 year tenure||Rs. 42,596|
|Total amount to be repaid (Principal + Interest)||Rs. 2,42,596|
2. If you do opt for the moratorium:
|Extra interest incurred during the moratorium period of 3 months*||Rs. 6,571|
|Interest payable over the remainder of the loan tenure (3 years)**||Rs. 42,596|
|Total amount to be repaid (Principal + Interest + 3 month moratorium period interest)||Rs. 2,49,167|
Note: * Extra interest incurred during the 3 month moratorium period = 2,167 (Month 1 interest) + 2,190 (Month 2 interest) + 2,214 (Month 3 interest) = Rs. 6,571. You can calculate your moratorium interest charge instantly using the personal loan moratorium interest calculator.
** As your loan tenure will be extended by 3 months as a result of the moratorium you still have to pay the interest incurred for the original 3 year tenure remaining on the loan = Rs. 42,596.
***Please note that the above example is for illustrative purposes only and actual values/calculation method may vary from one lender to another.
Thus, in the above case an additional Rs.6,571 needs to be paid as additional interest charges just for taking the 3 month moratorium on your Bank of India personal loan. This amount will be greater in case your loan amount and/or interest rate are higher. In short if you opt for this loan moratorium, your overall cost of borrowing will definitely increase.
How to Apply for Bank of India Personal Loan Moratorium?
Bank of India does not have a separate application procedure to avail EMI Moratorium. All eligible borrowers are automatically offered relief from servicing their loan EMIs for the moratorium period. Additionally, all automated payments have been stalled by the bank for the 1st March 2020 to 31st May 2020 period. However, in case a borrower wishes to opt out of the loan moratorium, they can do so via any of the following methods:
- SMS: SMS ‘COVIDNO’ to 9355019494 from their registered mobile number.
- Branch Visit: They can also visit their nearest Bank of India branch to opt out of the moratorium.
- By Phone: Get in touch with Bank of India customer care by phone on 1800-220-229 or 022-4091-9191 to place your loan moratorium opt-out request.
Also Read about Bank of India Personal Loan Apply Online.
Q1. What should I do in case I do not wish to avail the EMI Moratorium?
In case you wish to continue paying your EMIs as usual, you can contact Bank of India in any of the following ways given below:
- Branch Visit: Visit your nearest Bank of India branch to opt out of the EMI Moratorium.
- SMS: SMS ‘COVIDNO’ to 9355019494 from your registered mobile number.
- By Phone: Get in touch with Bank of India customer care on 022-4091-9191 or 1800-220-229 to opt out.
Q2. Does moratorium involve waiving off EMIs?
No. Moratorium simply means a repayment holiday or a deferment/postponement. Customers have to pay their EMIs (plus applicable moratorium interest charges) as per the original schedule once the moratorium period is over i.e. from 1st June 2020 onwards.
Q3. Are there any delayed payment charges for the missing EMIs during the moratorium period?
No delayed charges have to be paid in case of missed payments during the 3 month moratorium period.
Q4. Will auto debit be effective during the moratorium period?
No. all auto debits including ECS, Post Dated Cheques (PDC), Standing Instruction are stalled during the period of moratorium. You have to get in touch with Bank of India customer care in case you want to continue making EMI payments during this moratorium period.
Q5. Can opting for EMI moratorium have an impact on my Credit Score?
No. Payments missed/not paid during the moratorium period will not be reported to the Credit Bureaus and hence, there will be no adverse impact on your credit history or credit score.
Related Topic: COVID-19 Personal Loans in India