In view of the economic downturn in the country due to coronavirus, the Reserve Bank of India (RBI) has allowed lenders not to pay EMIs on their home or auto loans for the next three months. If you are also thinking of not paying EMI for the next 3 months, then you will have to pay more interest on your outstanding loan.
Will have to pay more interest
Analysts and experts say that not only the three installments of customers who take advantage of this scheme will increase, additional interest will also have to be paid for these three months period. Which will be added to your EMI at the end of the 3-month lockdown. This will increase your EMI. If you are paying an EMI of Rs 1000 and the bank is charging interest at the rate of 10 percent. So after 3 months, you will have to pay 25-25 rupees more on these three EMIs. This additional interest can be added to all your future EMIs.
How will the bank tell the customers to charge interest?
A financial sector analyst says that “whether customers have to pay this additional interest together or should be allowed to adjust it as additional EMI. The bank should tell this.”
What is the government’s announcement?
The RBI has given a three-month exemption to repay the term loan installment. All commercial, regional, rural, NBFC and small finance banks have been barred from recovering EMIs of all term loans. Customers can pay if they want to themselves, banks will not put pressure. Three months discount will also be applicable on payment of credit card dues. Under this, installment will not be deducted from the account of any person who has taken a loan for the next three months. This will not affect your credit score either. If you are unable to repay the loan installment for three months, then it will not be considered a default. Your EMI will resume after a period of three months. However, this does not mean that the arrears will never be repaid, the deferment is just three months. Just postpone three months, you will have to pay later. This step has been taken for the purpose that those who are really short of cash due to lockdown, then get some time to pay the debt.