The COVID-19 crisis and resultant lockdown has impacted the cash flow and earnings of many individuals and businesses. As a result the Reserved Bank of India has directed all banks to provide moratorium of up to 3 months on personal loan EMIs payments that are due between 1st March 2020 and 31st May 2020. Therefore, IDFC First Bank has provided a moratorium on personal loan EMI payments for the 3 month period and here are the details.
COVID-19 Relief Measures from IDFC First Bank
Opting for the moratorium on IDFC First Bank personal loan EMI is optional and you may choose to keep paying your EMIs as usual. However, if you choose to go with the EMI moratorium on your IDFC First Bank Personal Loan, the following would be the relief measures available to you:
- Your personal loan EMIs are deferred for up to 3 months
- Non-payment during the moratorium won’t get reported to the credit bureaus during the moratorium period and hence, your credit score won’t be impacted
- There will be no overdue charges or cheque bounce charges for EMIs during the moratorium period
But do keep in mind that if you opt for the moratorium, interest would be charged on the outstanding loan amount during the moratorium period and the tenure of the loan would also be extended. Hence, the customers must avail the moratorium only if they are unable to repay the loan.
Eligibility for Personal Loan EMI Moratorium
- All the IDFC First Bank customers who have no overdues prior to 1st March, 2020 are eligible for EMI moratorium. However, the customers with overdues prior to 1st March, 2020 can also request the bank for moratorium. The bank may consider such requests on a case by case basis
- The customer should not be under IBD proceedings or classified as wilful defaulter/ Fraud/ Red Flagged Account (RFA) by any bank or financial institution
- Rural and agricultural customers are automatically eligible for moratorium up to 3 months
Also, if a customer is originally not eligible for moratorium on EMIs, he can become eligible by regularizing his loan account by making the payment for over dues prior to March 1, 2020.
Personal Loan Moratorium Example
Let’s assume that you have an outstanding personal loan of Rs. 6 lakh at 11.5% p.a. interest rate during the moratorium with remaining tenure of 54 months. In such a case:
If you do not opt for the moratorium:
|Total interest payable for remaining 54 months loan tenure||Rs. 1,63,705|
|Total amount to be repaid (Principal + Interest)||Rs. 7,12,559|
If you do opt for the moratorium:
|Extra interest incurred during the moratorium period of 3 months*||Rs.15,707|
|Interest payable over the remainder of the loan tenure (4 year and 6 months)**||Rs.1,63,705|
|Total amount to be repaid (Principal + Interest + moratorium period interest)||Rs.7,33,652|
Note: * Extra interest incurred during the moratorium period of 3 months = Rs. 5,311 (Month 1 interest) + Rs. 5,236 (Month 2 interest) + Rs. 5,160 (Month 3 interest) = Rs. 15,707.
** 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 months (54 months) remaining tenure of the loan = Rs. 1.63 Lakh.
***Please note that the above example is for illustrative purposes only and actual values/calculation method may vary from lender to lender.
In the above illustrative example you will have to pay an additional Rs. 15,707 in accrued interest just for taking the 3 month moratorium on payment. This amount will be greater if your loan amount and interest rate are higher. In effect your personal loan interest payout will increase significantly if you opt for the moratorium.
Also Read: Personal Loan Moratorium Interest Calculator
How to Apply for IDFC First Bank Personal Loan Moratorium?
You can apply for IDFC First Bank Personal Loan Moratorium in the following ways:
- You can visit the official website of IDFC First Bank and submit your details to apply for the moratorium and the bank will activate the moratorium for the unpaid EMI of March 2020 (if any) and for the EMI of April and May, 2020
- You can send an SMS from your registered mobile number (as per IDFC First Bank records) to 80070 10908 along with your loan account number five days prior to the due date
- You can also send an email to firstname.lastname@example.org from your registered email address along with your loan account number to opt for the IDFC First Bank personal loan moratorium
Q1. What if I do not want to opt for moratorium on my personal loan? Do I need to inform the bank?
No, if you do not wish to opt for the moratorium, you do not need to inform the bank. All you need to do is to maintain sufficient balance so that the instalment gets debited as per the original schedule.
Q2. What should I do in a situation where I have no overdues prior to March 1, but my cheque/ECS for March has bounced?
In a situation, where there are no overdues prior to 1st March, 2020 and repayment instruments do not get cleared (bounced cheque/ECS) on presentation between 1st March and 31st May, 2020, it will be assumed that you have been impacted by COVID-19. Thus you will be automatically provided with moratorium on your personal loan.
Q3. How will I get to know if my loan moratorium application has been approved?
You will receive a confirmation email on your registered email address with approval
Q4. If I opt for the moratorium, how will I come to know about the status of my account and revised repayment schedule?
The updated loan repayment schedule would be send to your registered email address by the end of the month. You can also know about all the updates by logging in to the mobile app or internet banking.
Q5. Will my credit score get impacted if I go for the moratorium?
No, your credit score won’t be impacted during the moratorium period.
Q6. Is it possible to prepay or make a part- payment on my personal loan during the moratorium period?
Yes you can prepay your loan and/or part-pay your personal loan during the moratorium period too.
Q7. Will additional interest be charged by the bank under moratorium?
If you decide to go for the moratorium, interest would accrue on the outstanding portion of the loan at the same rate as applicable to your personal loan. The interest will be collected by extending the pre-decided tenure of your loan.