HDFC Credila

RBI's Moratorium on Loans Repayment in wake of COVID-19 disruption

HDFC Credila

The ongoing COVID-19 crisis has not only created a worldwide health emergency but has also stressed the financial situation of many individuals and businesses alike. While the Government has announced various relief packages, the Reserve Bank of India (RBI) has also announced relief measures for customers who are repaying term loans during this period.

Pursuant to RBI's announcement dated March 27, 2020, vide circular RBI/2019-20/186 & Statement on Developmental and Regulatory Policies & subsequent extension dated May 22, 2020 vide their circular RBI/2019-20/244 & Statement on Developmental and Regulatory Policies, RBI has permitted banks and financial institutions to further extend the moratorium for all payments (both principal & interest) due between June 01, 2020 and August 31, 2020

HDFC Credila extends choice of availing/ not availing moratorium to all its customers.

Please note that the consent to OPT IN or OPT OUT must be shared by June 7, 2020, by visiting https://www.credila.net/help

The Q&A below will help you understand this moratorium/payment rescheduling better:

1. What was the original moratorium scheme announced by the RBI on March 27, 2020?

As per RBI's circular dated March 27, 2020, lending institutions including HDFC Credila had been permitted to grant a repayment moratorium of up to three months for the monthly instalments between March 01, 2020 and May 31, 2020, including Pre Monthly Interest Instalment (PMII) and Monthly Instalment (MI). All loans that were disbursed on or before February 29, 2020 were eligible for the moratorium. RBI has not granted a compulsory moratorium. It has only permitted lenders to grant moratorium.

2. What is the relief the RBI has provided with the extension of the moratorium on May 22, 2020?

As per RBI's circular dated May 22, 2020, HDFC Credila and other lending institutions have been permitted to extend the moratorium on Monthly Instalments (MI) and Pre Monthly Interest Instalments (PMII) by three months i.e. June 1, 2020 till August 31, 2020.

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3. Is HDFC Credila offering the extension of the moratorium? 

Yes. The moratorium extension offered by HDFC Credila implies that customers can defer their payment of their monthly instalments, both PMII (only interest component) and MI (interest plus principal component) for a limited period from June 1, 2020 till August 31, 2020. The interest, at the applicable interest rate, shall continue to accrue on the outstanding portion of the loan during the moratorium period as this is NOT a waiver.

4. Who can avail of the moratorium?

HDFC Credila is extending the moratorium to all borrowers on their education loans that is disbursed and outstanding as on March 1, 2020, subject to the loan being not more than 179 days past due (DPD) as on May 31, 2020. Loans disbursed after March 1, 2020 are not eligible for the moratorium.

5. How does it apply to my loan? 

Customers who are currently availing the moratorium till May 31, 2020, will automatically get an extension till August 31, 2020. However, customers can OPT OUT of this extension of moratorium by giving consent on https://www.credila.net/help

Customers who have not availed the moratorium till May 31, 2020, can OPT IN avail the same from June 2020 till August 2020 by giving their consent on https://www.credila.net/help.

Those not availing the moratorium can continue to pay as per their regular amortization schedule.

Please note that the consent to OPT IN or OPT OUT must be shared by June 7, 2020, by visiting https://www.credila.net/help

6. How does the moratorium work? How does it impact my account?

Interest continues to accrue during the moratorium period and gets added to the principal for repayment. This leads to increase in the residual tenure of the loan. To check the current and revised term of the loan, kindly visit your account on https://www.credila.net/help

Please note that the interest, at the applicable interest rate, shall continue to accrue on the outstanding portion of the loan during the moratorium period as this is NOT a waiver.

Accordingly, it is recommended that only those borrowers who are facing temporary financial constraints due to COVID 19 should avail the moratorium.

7. At what rate will I be charged interest during the moratorium period?

The interest will be charged as per the applicable interest rate on your loan.

8. Do I need to give any stop payment instruction to my bank to stop instalment payments for June, July and August 2020?

No. There is no need to give any stop payment instruction to your bank to stop the instalment payments for the months of June, July and August 2020. HDFC Credila will simply not present the ACH Mandate to your bank for realisation of the instalments for the PMII/ MI during this moratorium period.

9. When do I need to restart the payment?

For all those who are availing moratorium, payments will re-commence from September 2020. No separate intimation will be given for the same.

10. Will the rescheduling of the payment for these three months qualify as default and affect my credit score?

For customers who are OPTING IN for the moratorium for the months of June, July and August 2020 will not result in reporting of default to the credit bureaus and thereby not impact your credit score.

11. Does this mean that I will have to pay 3 instalments in one go in September 2020?

No. As mentioned above, the interest accrued during the moratorium period on the loan outstanding will be added to the principal outstanding and will be spread over the revised repayment schedule.

12. Will there be any other change (other than the change in repayment schedule due to the moratorium) in the terms and conditions of the loan agreement for those availing the moratorium?

No. As this moratorium is being provided specifically to enable the borrowers to tide over economic fallout from COVID-19 as per RBI guidelines, the same will not be treated as concession or change in terms and conditions of loan agreements.

13. If I have multiple loan accounts at HDFC Credila do I have to apply for each one separately?

Yes, you will have to select the moratorium option for each account separately.