In view of the COVID-19 outbreak and the resultant economic disruptions, Reserve Bank of India announced the COVID-19 Regulatory package on 27th March, 2020 to ease the repayment burden on existing borrowers. As a result, banks have been allowed to offer a 3-month loan moratorium, i.e., borrowers can defer the repayment of loan EMIs with due dates falling between 1st March, 2020 and 31st May, 2020. No penal charges will apply during this period however interest will continue to accrue. The following sections provide key details of the Citi Bank personal loan moratorium.
COVID-19 Relief Measures by Citibank
Citibank has allowed deferment of the payment of loan EMIs as well as credit card dues for the months of March, April and May 2020 amid the COVID-19 lockdown and the associated income losses suffered by many individuals. The bank will not charge any penalty or fees for such a delay. Furthermore, such a delay will not affect your credit score. But it should be noted that interest will keep on accumulating during this period, as the payment is only being deferred and the loan EMIs are not waived off.
- If you do not want to opt for the moratorium and continue to normally pay your personal loan EMIs, then no additional action is required from your end. The bank will continue to present the EMI payment instrument (Electronic Clearing System mandate, post-dated cheque, etc.) as per normal business practice to get EMIs cleared.
- If you want to opt for the moratorium and postpone the EMI payments with due dates falling between 1st March, 2020 and 31st May, 2020, then you need to write to firstname.lastname@example.org using your registered email address as per bank records. We have discussed the detailed procedure to apply for the Citibank personal loan moratorium in the later section of this article for your convenience.
- If you want a refund for an EMI already paid during the moratorium period, then you can apply for a refund by writing to email@example.com. The approval for such a refund will be provided by Citi Bank on a case by case basis and it generally takes 10-15 days to get processed.
Note: Weigh both the pros and cons of the loan moratorium for your personal loan EMIs before opting for it. While the moratorium will give you some extra time to temporarily delay the EMI payments, it will also lead to excess interest payout.
Eligibility for Citibank Personal Loan EMI Moratorium
Following are the eligibility criteria to avail personal loan moratorium from Citibank:
- You should have taken the personal loan on or before 1st March, 2020. New loans i.e. those disbursed after 1st March 2020 are not eligible for the relief package.
- Further, the moratorium is only available for loans in good standing as of March, 2020. In other words, there should be no default in repayment of prior dues.
NOTE: Citibank has sent out SMS/email communications to inform the customers eligible for the 3-month loan moratorium on their registered mobile number/ email address. You can opt in for the moratorium using the link provided in the Citi Bank SMS/email.
What will be the Effect of Moratorium?
Let us understand the effect of moratorium on the total interest payout of a personal loan with the help of the following example.
For example: Suppose you have an ongoing personal loan with Citibank at an interest rate of 12% p.a. The principal outstanding is Rs. 10 lakh with a residual tenure of 24 months at the time of moratorium. Let’s see how the moratorium will increase the interest payout of your Citi Bank personal loan.
If you do not opt for the moratorium:
|Total interest payable for the residual tenure of 24 months (2 years)||Rs. 1.29 lakh|
|Total amount to be paid (Principal + Interest)||Rs. 11.29 lakh|
If you opt for the moratorium:
|Extra interest accrued over the moratorium period of 3 months*||Rs. 30,301|
|Interest payable over the residual tenure of 24 months (2 years)**||Rs. 1.29 lakh|
|Total amount to be paid (Principal + Interest + Moratorium period interest)||Rs. 11.60 lakh|
* Extra interest incurred during the moratorium period of 3 months = Rs. 10,000 (Month 1 interest) + Rs. 10,100 (Month 2 interest) + Rs. 10,201 (Month 3 interest) = Rs. 30,301
**As a result of the moratorium, your loan tenure will be extended by three months and you still have to pay the interest incurred for the original remaining tenure of 2 years for the loan = Rs. 1.29 lakh.
NOTE: The above calculation has been done for an illustrative purpose and the actual interest payable may vary from lender to lender. You can calculate moratorium interest for your loan using the COVID-19 personal loan moratorium interest calculator.
From the above example it is clear that the interest cost of the outstanding loan increased by Rs. 30,301 because a loan moratorium was availed. This amount can increase further for higher outstanding loan amounts an loan interest rates.
How to Apply For Citibank Loan Moratorium?
You can apply for Citibank personal loan moratorium by using the following methods:
Option 1: If you have received a communication via SMS/e-Mail from Citi Bank stating that you are eligible for a loan EMI moratorium, just click on the link provided and submit required details to avail the moratorium.
Option 2: Write an email to firstname.lastname@example.org mentioning that you want to avail loan moratorium and want to stop the mandate for the applicable months. In case your EMI for the month has already been deducted, you can still submit your details and Citi Bank will consider refunding the EMI paid on a case by case basis.
If you don’t submit a request to stop the mandate for the moratorium period, the bank will continue to normally present the loan EMI payment mandate provided by you. If there are no funds in your repayment account and the EMI remains unpaid due to a cheque bounce, the bank will not charge any late payment fees. There will also be no impact on your credit score if you opt for the moratorium. However if there are funds in your account, the loan EMI will get debited as per the original repayment schedule.
How to Contact Citibank for Moratorium Related Queries?
Write an email to email@example.com, if you have any moratorium related queries about Citibank personal loan. Please ensure to follow the below points to ensure that your request is responded to by Citi Bank at the earliest:
- Send the email to Citi Bank from your registered email ID (as per bank records).
- Mention “Personal Loan < last 4 digits of loan number >” in the subject line.
- Clearly specify your query and the desired option: a) No EMI presentations in <applicable month(s)>, or b) No EMI presentations in <applicable month(s)> and refund of <applicable month> EMI payment (if already cleared).
NOTE: Only customers, who have received an SMS/email from Citibank with the loan moratorium offer are currently eligible for it.
Important Related Terms
We discussed in the previous section that you need to request Citibank to stop auto debit from your loan EMI repayment account, if you wish to avail the loan moratorium. Let’s understand what these options for auto debit are, so that you have a fair idea before writing such an email.
- Standing Instruction (SI): This option allows the bank to automatically deduct loan EMIs from your Citibank account on the designated due dates. As a result, you need not remember the due dates or issue monthly cheques. You can avail this option by filling out a form to activate the SI mandate.
- ECS Mandate: ECS is short for Electronic Clearing Service and it is a common auto-pay method used by borrowers to repay their loans. ECS mandate needs to be submitted only once unlike submission of multiple post-dated cheques as per the loan tenure.
- National Automated Clearing House (NACH): This auto debit option is useful when you don’t have a Citibank account, as NACH allows you to pay the personal loan EMIs from your account with any other bank on the respective due dates.
Frequently Asked Questions (FAQs)
Q1. Is the relief available for Citibank credit card dues also?
Ans. Yes, the moratorium is also available for the payment of your Citibank credit card dues.
Q2. Will missing EMI payment during the moratorium period affect my CIBIL score?
Ans. No, any delay in the payment of loan EMIs during the moratorium period will not affect your CIBIL score or the credit score provided by any other credit bureau.
Q3. Should I pay or defer?
Ans. If you have to money to continue repayment, you should definitely continue paying the loan EMI or credit card dues as per the original schedule. This is because opting for the moratorium will result in extra interest payout on your loan/credit card dues. The key thing to remember is that the payment is only being deferred and not waived off.
Q4. What is the 3-month loan EMI moratorium?
Ans. The 3-month loan EMI moratorium means that you are allowed to delay (defer) the payment of outstanding loan EMIs with due dates falling between 1st March, 2020 and 31st May, 2020. No late payment charges will be levied and your credit score will not be affected due to this delay, but the interest will keep accumulating in the meantime.
Q5. What should I do, if I don’t want to opt for the EMI moratorium?
Ans. You don’t need to do anything other than continuing with your scheduled EMI payments, if you don’t want to avail EMI moratorium on your Citibank personal loan/term loan/credit card dues.