With the whole nation under lockdown to slow down the exponential spread of the novel coronavirus (COVID-19), businesses have been hit which has led to a disruption of financial liquidity for a lot of people. Things may have become especially worse for those who have taken loans of one or the other kind had it not been for the RBI’s intervention. Paying Equated Monthly Installments (EMIs) of those loans would have been a nightmare for some of the borrowers whose finances have been affected by an unprecedented nationwide lockdown. However, coming to their rescue, the Reserve Bank of India instructed banks to grant an optional three-month moratorium on all outstanding loans to all borrowers on their EMIs.
Those who can pay their EMIs comfortably should continue to do so
This essentially means that borrowers can defer their EMI installments that are due for payment till May 31, 2020, without any penalties or any impact on their credit scores. Loans ranging from home loans, personal loans, car loans, corporate loans, agriculture loans, and even credit card loans availed from commercial, regional, rural, NBFCs, and small finance banks come under this scheme. However, those availing this optional moratorium would have to pay the interest for this additional three-month period.
Due to this, many questions have arisen among people regarding whether it makes sense for them to opt for this moratorium or whether they should continue to pay their EMI installments during these three months as well. The verdict is not completely straight-forward. The moratorium would make sense for those individuals whose capacity to pay their EMIs has been substantially hit. Those who can pay their EMIs comfortably should continue to do so as opting for a moratorium would only add more liability for them.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.
PLANNING TO BUY CHILD INSURANCE? THINK TWICE
Child insurance plans combine insurance and investment but often offer low returns due to high costs, making a combination of a term insurance cover and mutual fund a better option for securing your child’s higher education needs
How Do You Define Happiness?
Money does buy happiness, but after a while, the appeal fades. We talk about our relationship with money, but, maybe, it’s time to revisit our relationship with happiness
Avoid Crypto As It Is Highly Volatile
I am 22 years old and have recently started working. I want to invest a small portion of money in cryptocurrency. How should I go about it? Does it require a huge capital investment?
Invest Right, Don't Speculate
The lure of high returns and quick gains from equity tips, cryptocurencies, and equity F&O can be enticing. But remember, return of capital is more important than return on capital
The Wedding & Budget: Is Minimalist Trend The Right Knot For You?
Indian weddings are known for their pomp and grandeur, but minimalist weddings are also in vogue now. Dia Mirza was one such celebrity who went for a minimalist wedding. If you also want to keep things minimal on your big day, here’s how to do it
Here's How To Buy An ETF?
Mutual funds are the preferred choice for retail investors. However, they come at a cost and fund management risk, apart from other risks. A smarter alternative is to invest through ETFs.
How Passive Funds Help Diversify
Passive funds provide a simple way to invest in broad markets as well as in specific themes and sectors, making them ideal for an investor's satellite portfolio
The Rise Of Passive Funds
The popularity of passive funds among retail investors has risen post Covid, and fund houses are out with many variations of ETFs and index funds. Does this category present a new opportunity for investors?
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms