According to the latest directive issued by the Reserve Bank of India (RBI), borrowers are allowed a 3-month moratorium period on instalment payment. This moratorium period on home loans borrowers is thus similarly applicable on EMI payment for the months of March to May. As a result, individuals have received relaxation from paying both the principal and interest component as EMI for 3 months.
However, notwithstanding the urgency of this instruction, there are some advantages and disadvantages of a moratorium on home loans in general. On the other hand, individuals often wonder whether opting for a moratorium on housing credit EMI is a viable financial option. Therefore, let’s consider some of the positive and negative consequences of choosing a moratorium period on home loans.
Applying for a moratorium period for a home loan EMI has its own set of advantages. Even though it is merely a ‘grace period’ or a ‘holiday period’, a moratorium has some short-term financial implications. Therefore, it is an efficient option for individuals who are facing some temporary difficulties to meet their home loan EMI obligations.
Moreover, some of the additional perks of home loan moratorium period include the following –
To overcome this particular scenario; a home loan moratorium comes as way out. With this option, individuals can avoid defaulting on home loan EMI to prevent undesirable outcomes. It is especially so for the ones who are facing delays while receiving their monthly salary. Therefore, moratorium takes into account these unexpected occurrences and ensures maximum financial comfort, albeit temporary.
A moratorium period thus provides a window of opportunity to channelise one’s finances in the most urgent direction. Besides, individuals can also opt for a moratorium period to accumulate excess funds to pay their EMIs in the subsequent months. Consequently, individuals can manage their short-term financial requirements and EMI payment with this beneficial process.
With the discussion on the perks of a moratorium on home loans, let’s move on to the drawbacks of this facility.
Moratorium period on home loans can also be associated with a handful of shortcomings. Since this facility is only a temporary relief, individuals do have to fulfil their repayment liabilities at the end.
Therefore, the prominent disadvantages of this moratorium include the following –
However, a comparison between the perks and drawbacks suggests that an EMI moratorium is a beneficial option if you need to adjust finances immediately. There are many other benefits of moratorium period. Consequently, individuals can gain financially from moratorium periods, especially on high-value home loans like up to Rs.3.5 crore issued by reputed HFCs.
Besides, these lenders also provide pre-approved offers on a range of secured financial products such as home loans and loan against property. These offers additionally make for a time-saving and hassle-free approval experience. You can check your pre-approved offer just by entering your name and contact information.
As for moratorium on home loan EMI, it is a beneficial option to manage short-term finances. Additionally, this allows individuals to pay attention to other financial requirements that may be urgent to attend.