What is the RBI Moratorium Scheme?

In the wake of the Covid-19 pandemic, the RBI introduced a moratorium scheme for all loans. At first, it was offered for March-May, 2021 but was later extended to three more months (June-August, 2021). The aim was to give temporary relief to borrowers who had trouble repaying loans in the pandemic-induced economic instability. Since the economic impact continued into 2021, the RBI declared on May 5, 2021, that if the moratorium period is granted, it may be available for 2 years at most. It shall be operational right after the 2.0: Resolution of Covid-19-related stress of Individuals and Small Businesses is implemented.

         


  

What is Moratorium Period?

Usually, it would help if you started repaying a loan right after it was granted. However, a moratorium period is legally authorised to delay the repayment so that you can avail of a grace period before starting to pay fixed EMIs. The moratorium period applies to all kinds of loans, including instant personal loans offered by fintech companies.


Benefits of Moratorium Period

  1. No negative credit-rating

Whether your financial emergency surpasses your repayment capacity or your income is unstable, you can get some relief from a loan moratorium. Usually, delayed EMI payments bring down a borrower’s credit score. However, now, if the delayed payment is within the available grace period of a cash loan, there would be no harmful impact on your credit score. 


  1. More convenient repayment

A moratorium period can give you more time to arrange for funds to pay the EMIs. You can avoid a penalty for late payment or loan default. This would again prevent your credit score from being negatively impacted. 


  1. Relief during a liquidity crisis

The pandemic is still going on, and you need financial protection. If there is a medical emergency or a job loss, the moratorium scheme can help you pay loan EMIs more conveniently. A leading fintech company offers added protection to borrowers on its loan app to go a step further. If you borrow a loan on the app, you can opt for an income protection cover and a health cover to secure your EMI payments in times of financial or medical crisis. 


Conclusion

Consider applying for a cash loan on a reputed fintech company’s loan app on your Android or iOS device whenever you have an urgent cash requirement. You can get instant cash and repay it conveniently with the available grace period. No more need to undermine your needs due to financial worries! 

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