On May 5, 2021, the RBI announced the second loan moratorium to help minimise the financial difficulties faced by individual borrowers due to the second wave of the Covid-19 pandemic.
The moratorium can help borrowers tide over financial exigencies and avoid defaults in loan repayments which not only result in penalties and higher interest costs but may also impact their credit history adversely and reduce their creditworthiness in future.
The relief measures can be availed by eligible borrowers who did not use the first loan moratorium and those who did, can get their moratorium period extended. However, the second moratorium comes with different eligibility conditions for different borrowers and will work differently for borrowers who did and did not avail the first moratorium.
Borrowers who did not avail the earlier moratorium will be eligible to avail the second moratorium only if they were classified as “Standard” or had no defaults in loan repayments till 31 March, 2021. While those who had opted for a moratorium in 2020, can also avail a new moratorium under which their remaining tenure can be extended up to a total of 2 years.
September 30, 2021 is the last date for borrowers to approach their lenders and request for restructuring of their loans. Once you apply for the moratorium and fulfill all the eligibility conditions, the lender will have to implement it within 90 days.
