In order to ease the burden on borrowers in light of the COVID- 19 crisis, the Reserve Bank of India has asked all banks/ financial institutions of India to provide its customers some relief in loan repayment schedules. Pursuant to this RBI directive, HDFC Bank has provided moratorium of up to 6 months on personal loan EMI payments that are due between 1st March 2020 to 31st August 2020. The following are details of the moratorium guidelines on all term loans including HDFC Bank personal loan.
COVID-19 Relief Measures from HDFC Bank
The moratorium on loan EMIs payable to HDFC Bank is voluntary. If you choose the COVID-19 EMI Moratorium on your HDFC personal loan, the relief measures offered by HDFC Bank are as follows:
- HDFC Bank will not ask for EMI payment of your personal loan till August 31st 2020
- Interest will accrue throughout the moratorium at the contracted interest rate of the loan
- The personal loan tenure would also get extended by the corresponding period for which you have availed the moratorium. Let’s say, if you have paid the EMI of Mar 2020 and have availed the moratorium for April and May, 2020, your loan tenure would be extended by 2 months from the original loan repayment end date
Eligibility for HDFC Bank Personal Loan EMI Moratorium
The eligibility criteria for HDFC Bank Personal Loan EMI Moratorium are as follows:
- All the HDFC Bank customers who have availed a personal loan before 1st March 2020 are eligible for the EMI Moratorium
- Customers who have overdues prior to 1st March 2020 may also be eligible to opt for the moratorium. The bank will consider their requests on a case by case basis
Since interest will accrue over the entire loan moratorium period the following example illustrates how much additional interest will have to be paid by you:
Let’s say, if you have an outstanding personal loan of Rs. 4 lakh at 12% p.a. interest rate during the moratorium with remaining tenure of 54 months. In such a case:
1. If you do not opt for the moratorium:
|Total interest payable for 4 year 6 months loan tenure||Rs. 1.20 lakh|
|Total amount to be repaid (Principal + Interest)||Rs. 5.20 lakh|
2. If you do opt for the moratorium:
|Extra interest incurred during the moratorium period of 2 months*||Rs. 12,120|
|Interest payable over the remainder of the loan tenure (4 year and 6 months)**||Rs. 1.20 lakh|
|Total amount to be repaid (Principal + Interest + moratorium period interest)||Rs. 5.32 lakh|
Note: * Extra interest incurred during the moratorium period of 3 months = 4000 (Month 1 interest) + 4040 (Month 2 interest) + 4080 (Month 3 interest) = Rs. 12,120.
** 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 4 year 6 month remaining tenure of the loan = Rs. 1.10 Lakh.
***Please note that the above example is for illustrative purposes only and actual values/calculation method may vary from lender to lender.
Thus in the above case you have to pay an additional Rs. 12,120 in interest just for taking the 3 month moratorium on your loan repayment. This amount can be much greater if your loan amount and interest rate are higher. In short if you opt for the moratorium your overall cost of borrowing will go up.
How to Apply for HDFC Bank Personal Loan Moratorium?
The following are the different ways you can opt for the HDFC Bank personal loan moratorium:
- Call the bank at 022-50042333 or 022-50042211 from your registered mobile number
- Fill out the loan moratorium form on the official website of HDFC Bank to submit your request. The application process requires you to provide key details such as:
- Bank registered mobile number
- First and last name
- Email ID
- Date of Birth
- Loan account number
- EMI amount
Q1. What should I do if I do not wish to opt for EMI Moratorium?
If you do not wish to opt for EMI Moratorium, no action is required from your end. Just remember to keep adequate funds in your account for auto- debit.
Q2. I have a personal loan and a home loan from HDFC Bank. Is it possible to get EMI Moratorium on both the loans.
Yes, you can avail EMI Moratorium for both the loans. But, do remember that the additional interest for the EMI moratorium period will be applicable on both the loans separately.
Q3. Will availing EMI moratorium affect my credit score?
No, availing a personal loan would not affect your credit score. Missed payments during the moratorium period will not get reported to the credit bureaus.
Q4. Should I pay or opt for the moratorium?
As mentioned in an earlier section, opting for the moratorium will increase your loan repayment cost. Thus it is best to continue paying your EMIs regularly if you can afford to do so. The moratorium should be kept as a last resort only.
Q5. What happens at the end of the moratorium period?
After end of the moratorium period, you will have to continue your EMI payments as per the contracted schedule. Failure to do so will lead to penalties as applicable to the loan defaulter clause of your loan agreement.
Q6. Are there any charges for availing the moratorium?
Extra charges applicable to availing the loan moratorium is the interest that will accrue on your loan during the period. This coupled with the extended loan repayment period can lead to significant increase in the cost for borrowing for you.
Q7. I already paid my May EMI for HDFC personal loan. Can I opt for moratorium for the remaining 3 months?
Yes. If you want you can opt for moratorium for only the remaining 3 months for your HDFC bank personal loan. However, interest will accrue for all 3 months which will add to the cost of your loan.