In the face of the current COVID-19 related health crisis and the nation-wide lockdown having significant financial impact, RBI has instructed all banks and financial institutions of India to provide their customers a 3-month moratorium on all term loans, including personal loans. As per RBI’s directive, Punjab National Bank (PNB) has provided its personal loan account holders the option to opt for a moratorium of up to 3 months on personal loan EMI payments due between 1st March 2020 to 31st May 2020. The following sections discuss some important aspects pertaining to PNB Personal Loan COVID-19 Relief Measures including the eligibility criteria, application process, etc.
What is PNB Personal Loan Moratorium
Designed as a temporary relief measure to decrease the financial burden on borrowers during the COVID-19 pandemic-related health crisis and lockdown, RBI has permitted all banks and financial institutions to offer a 3-month moratorium on all term loans, including personal loans. The moratorium legally allows borrowers to postpone/defer the EMI payments on their personal loans for the next 3 months for EMI due dates falling between 1st March, 2020 and 31st May, 2020. Such deferment is neither penalized nor chargeable through late payment fees. However, interest shall keep accruing during this period at the applicable personal loan interest rate. Additionally if you opt for the PNB Personal Loan moratorium your original repayment tenure will be extended by up to 3 months.
COVID-19 Relief Measures from PNB
As per RBI’s directive, PNB personal loan account holders have the option to defer the payments on their personal loan EMIs for up to 3 months for due dates falling between 1st March, 2020 and 31st May, 2020. Opting for the moratorium is completely optional and voluntary. No action is required in case customers decide to pay their personal loan EMIs as per the original schedule. However, in case they choose to opt for moratorium on their PNB personal loan, PNB offers the following relief measures:
- Customers can defer the payment of their PNB personal loan EMIs (both the principal and interest) till 31st May, 2020.
- Interest shall accrue over the entire moratorium period at the contracted interest rate of the loan.
- The original repayment tenure would also get extended by the corresponding period for which you have availed the moratorium. For instance, if you have made the EMI payment for March 2020 and opted for the moratorium for April and May, 2020, your original loan repayment tenure would be extend by 2 months i.e. the duration of the moratorium you have opted for.
Eligibility for Personal Loan EMI Moratorium
There is no particular eligibility criteria required to avail the benefits of PNB personal loan EMI moratorium. The deferment benefits are available across all term loans (including personal loans) irrespective of tenor. However, submission of the moratorium request by itself does not guarantee the moratorium benefit as Punjab National Bank retains the right to accept or decline requests on a case by case basis.
The following example is designed to illustrate how your loan payment amount will be impacted in case you opt for PNB personal loan moratorium.
Let’s assume that you have an outstanding loan amount of Rs. 3 lakh at 12% p.a. interest rate with outstanding loan tenure of 2 years at the time of the loan moratorium:
1. If you do not opt for the moratorium:
|Total interest payable for 2 year tenure||Rs. 38,929|
|Total amount to be repaid (Principal + Interest)||Rs. 3.39 lakh|
2. If you do opt for the moratorium:
|Extra interest incurred during the moratorium period of 3 months*||Rs. 9,090|
|Interest payable over the remainder of the loan tenure (2 years)**||Rs. 38,929|
|Total amount to be repaid (Principal + Interest + 3 month moratorium period interest)||Rs.3.48 lakh|
Note: * Extra interest incurred during the moratorium period of 3 months = 3000 (Month 1 interest) + 3030 (Month 2 interest) + 3060 (Month 3 interest) = Rs. 9,090.
** 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 2 year tenure remaining on the loan = Rs. 38,929.
***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. 9,090 in interest charges just for taking the 3 month moratorium on your PNB personal loan. Additionally this extra interest payable amount will be much higher if your outstanding loan principal and/or interest rate are higher. In short if you opt for this loan moratorium, your overall cost of borrowing will go up.
How to Apply for PNB Personal Loan Moratorium?
You can apply for PNB Personal Loan moratorium via any of the following means given below:
- Call: Simply give a missed call on 8743950000 from your registered mobile number (as per bank records).
- Email: Send the EMI moratorium application form via email.
- Website Link: Visit the official website of PNB and follow the steps given below:
- On the homepage, under the ‘Whats New’ section click on ‘Application for Availing Relief Under COVID-19 Regulatory Package’ to download the application form.
Fill out the relevant details and submit the same via email or drop it off in-person at the bank’s registered address. The following is a screenshot of the PNB COVID-19 Regulation Package application form.
Q1. What should I do in case I do not wish to opt for EMI Moratorium?
No action is required from your end in case you do not wish to opt for EMI Moratorium. You can continue paying your EMIs as per your original repayment schedule.
Q2. Can EMI Moratorium be availed on all types of loans?
Currently EMI Moratorium can only be availed on term loans (that come with specific repayment tenure) including home loans, personal loans, term business loans, etc. All PNB term loans outstanding as on 1st March, 2020 are eligible for EMI moratorium.
Q3. I have a home loan as well as a personal loan from PNB. Can I get EMI moratorium on both the loans?
Yes, you can avail EMI moratorium for both the loans. However, the additional interest for the EMI moratorium period will be applicable on both the loans separately.
Q4. What will happen when the moratorium period ends?
Once the moratorium period ends, you will have to make your EMI payments as per the contracted schedule. In case you fail to do so, you will be penalized as per the clause of loan default stated in your loan agreement.
Q5. I have already paid the EMI due on my PNB personal loan for the month of March. Can I opt for EMI moratorium for the next 2 months?
Yes. You can opt for EMI moratorium for the next 2 months. However, interest shall continue to accrue for the next 2 months which will add to the cost of your loan. Also your current loan tenure will be extended by 2 months as a result.
Q6. Can opting for EMI moratorium affect my credit score?
No, the EMI moratorium will not impact your credit score. Missed payments during the moratorium period will not be considered by credit bureaus to calculate your credit score as long as you have opted for the loan moratorium.