Honouring the Reserve Bank of India’s (RBI) directive for banks and financial institutions to provide a three-month moratorium to all credit borrowers, PaySense has given a choice to all its customers to defer the EMIs on their personal loans.

The objective of this step is to ensure that people undergoing financial hardships are able to use limited financial resources to fulfill their personal needs during the COVID-19 crisis. Here is everything you need to know:

What is a moratorium? 

A moratorium is a legally authorised delay in the execution of a legal obligation or repayment of debt. In this case, the RBI has directed banks and lenders to offer this to their customers. While the specific rules and processes of each bank may vary, most borrowers can choose to postpone the payment of their EMIs by a period of 3 months (between 1 March and 31 May 2020). Almost all leading banks and institutions have agreed to honour the RBI’s directive and laid down the rules of how customers can avail the moratorium. 

The moratorium applies to all kinds of credit (including home loans, education loans, car loans, agricultural loans, personal loans, credit card, etc.) PaySense is also offering the same to all its customers.

What are the pros and cons of opting for the moratorium?

Pros

  • You get temporary relief from paying the EMIs and can allocate scarce funds towards prioritising personal expenses.
  • Your loan profile will not be blacklisted, attract penalties and your credit score will not be affected if you choose to delay your EMI payments.

Cons

  • Since this is a moratorium and not a waiver, you will continue paying interest on your loan. Thus, you will end up paying a higher interest amount or will have to pay more EMIs to repay the loan.

How should you decide whether to opt for the moratorium or not?

6 important things to remember

  1. The moratorium simply provides a grace period to borrowers, it does not waive off the loan or the EMIs.
  2. As per experts, opting for the moratorium might extend your loan repayment tenure by a few months, or your EMI amount might be increased in the future. 
  3. The longer the remaining loan payment tenure, the higher the impact on your interest or number of installments.
  4. Avoid choosing the option of deferring your EMI in case you have outstanding dues on your credit card, as you will end up paying much higher interest and additional charges. 
  5. Contact your bank or lender for clarification on how to opt for the moratorium and what are the different ways in which it will impact your EMI amount or number of installments.
  6. Do not fall prey to fraudsters and scammers calling you to provide OTPs to defer your EMIs. No bank or financial institution follows this process. Contact the official bank helpline number if in doubt.

How do you opt for the moratorium on a personal loan with PaySense? 

If you are currently undergoing acute financial hardship and are unable to repay EMIs on your PaySense personal loan, please visit the PaySense Covid-19 RBI EMI Relief form and click on “Request for Moratorium.”

You can also calculate the extra interest amount that you will be paying by opting for the moratorium using the simple estimate calculation demonstrated in the form.

Thus, you should defer your EMI only as a matter of last resort. If you have enough funds and can pay the EMI comfortably, it would be best to continue paying them to avoid higher interest payments. 

What should you do if you do not want to opt for the moratorium?

If you want to keep paying your EMIs on time, you do not have to do anything. Your repayment will proceed as per schedule.

Stay Safe.

The PaySense Team.