postpone your EMI payment because of the Moratorium - 3

Planning to postpone your EMI payment because of the Moratorium? This is how much you’ll have to pay in June!

Indians are practising Social Distancing because of the Coronavirus scare that has affected over a million people worldwide. The RBI understanding this situation gave Banks the option of deferring dues of loan and credit card users from March 1 to May 31, 2020.

Since last week, several Banks have provided steps on how you can avail this moratorium benefit. Please remember that all credit card dues from the 1st of March until 31st of May, 2020 will be eligible for the deferment in payments.

What people usually get confused is the meaning of deferment. It’s not like the Banks are waiving off these payments. You will have to pay these 3 months dues later. What customers don’t realise is the fact that post 3 months, this amount will be very huge along with interest that’s more than 40% per annum!

Hence keeping this in mind, we have answered some of the most important questions any person with a credit card would ask:

As a credit card customer, should I request my Bank for this moratorium period?

Now this is purely your decision. If you don’t have income and money is a problem, then you might consider this option. However if money is not a problem, we would recommend you to keep paying off your bills.

Most Banks have “opt-in” facility where the customers can opt for the moratorium. Some Banks have an “opt-out” facility where if you don’t pay for 1 month, the Bank automatically understands that you want the moratorium!

When will I have to pay up all the dues once I take the moratorium?

Your June statement will reflect the total amount due and the minimum amount due. This means you will get all information on the previous outstanding amount, interest levied by the Bank etc.

If I decide not to pay my dues in April, will the interest on this amount keep compounding until June?

Now this is the most important question you should be asking. Yes, the amount will keep compounding. Here’s a table to make you understand better:

As on March end,

Credit card bill – 1,00,000 INR

Interest charged – 3.5%* per month

Accumulation of Dues Your Final Bill
Amount due on March (A) 1,00,000
Interest accumulated until April End (B) 3,500
Amount due on April (C = A + B) 1,03,500 
Interest accumulated until May End (D) 3,622
Amount due on May (E = C + D) 1,07,122
Interest accumulated until May End (F) 3,749
Amount due on June (G = E + F) 1,10,871

The best way to understand this table would be;

  • In March your principal outstanding amount was 1,00,000.
  • After you opted for moratorium, interest of 3,500 was applied on principal amount.
  • Hence on 1st April, your principal amount will be 1,00,000 + 3,500 = 1,03,500.
  • This means in the month of April you will be charged interest on 1,03,500!

If you noticed, not paying your bill worth 1 lakh in March means after the 3 month moratorium period, you will be paying 10,871 INR extra. That is a lot of money. Yes, you can get temporary relief and not get a bad credit score. But you will lose out on extra money at the end of June.

If I have utilized a part of my balance and decide not to pay my bill on April 1, will I still be able to utilize the remaining portion during April and May?

Now, this totally depends on your Bank. If they allow, you will be able to transact using your card during the moratorium period. But if the Bank wishes, they can place a cap on your transaction privileges too. Kindly contact your Bank and understand your rights.

If my cash crunch eases, will I be allowed to make some payment towards my card dues during the moratorium?

Again, after opting for the moratorium if, in few days, you do get cash and can make a payment towards your credit card bill, you can make the payment as you will only be charged interest on the outstanding amount.

If I have not paid my dues prior to 29th Feb 2020, will I get the moratorium period benefits?

No. Only card holders that have cleared all their dues until February 2020 can opt for the moratorium period. The rest will not be considered eligible for the moratorium period.

Will I be charged Late Payment Fees or any other hidden charges for non-payment of credit card dues during the moratorium period?

If you have availed the moratorium scheme on your Credit Card through the Bank, then late payment charges will not be levied during the moratorium period.

Will availing the moratorium affect my credit score?

Not at all. You will not be considered as a defaulter or lower your credit score. Your credit score will be affected only post-June when you don’t repay the bill post the moratorium period.

What happens to my reward points?

They are safe! Nothing happens to them! In fact, whenever you plan to repay your bill, you will continue to earn reward points (even in the moratorium period).

In conclusion, we would like to inform all our customers that you can opt for Balance Transfer of Cards through the best personal loan via Ruloans. You can do this once the lockdown ends.

The reason you must opt for this is because the interest rates are lower (10.5% to 18%*) when compared with credit cards that can go above 40%*.

You can contact us on the below platforms for this service:

Toll Free – 1800 2667576

Email – support@ruloans.com

Pin It on Pinterest