Based on the announcement made by the Reserve Bank of India (RBI) to allow banks and NBFCs to offer a moratorium on Term Loans, Bajaj Finance has decided to offer the same to its eligible customers. All its customers, including the ones who have borrowed personal loans and have no more than two EMIs due for payment and also have a consistent repayment track record, are eligible for a moratorium.
To ease the liquidity crisis that a borrower may face amid the COVID-19 lockdown, the moratorium period can be availed for 3 months i.e., March, April, and May 2020. If you’re an eligible customer and decide to opt for it, no EMI will be debited from your account during the period.
What is the meaning of the moratorium period?
A moratorium period refers to a particular period during the loan tenure in which you don’t have to pay any equated monthly instalments (EMIs). Also referred to as EMI holiday, it can be defined as a waiting/ break time for you as a borrower before you begin or resume to pay the monthly instalments.
In the case of a personal loan, you’re obligated to pay EMIs right from the start of the tenure until the end of it. However, if you opt for a moratorium, you won’t have to repay the lender any amount during that course of time. Even though during this time you don’t pay anything, you'll still accrue interest on your personal loan. In addition, your overall loan tenure will also increase by the number of months you’ve opted for a moratorium.
Differences: Moratorium vs Grace Period
Feature |
Moratorium |
Grace Period |
Definition |
A temporary suspension of loan EMIs during which repayment is deferred. |
A short period after loan disbursement during which borrowers can delay the first EMI without penalty. |
Duration |
Can vary based on RBI guidelines or lender policies, often several months. |
Typically a few weeks to a month after loan disbursal. |
Interest Accrual |
Interest may continue to accrue on the outstanding principal. |
Interest may or may not accrue, depending on lender terms. |
Applicability |
Mostly applicable during financial crises, emergencies, or special schemes. |
Applicable automatically for new loans to provide borrowers initial repayment relief. |
Borrower Action |
Borrowers usually need to request or be eligible for the moratorium. |
Usually automatic; borrowers need not apply. |
Impact on Loan Tenure |
Can extend the overall loan tenure if interest is capitalised. |
Usually does not affect the total loan tenure. |
RBI Guidelines for Loan Moratorium
Moratorium is granted only on principal repayment, while interest accrual may continue.
Applicable for all eligible term loans, including personal, education, housing, and vehicle loans.
Lenders must communicate moratorium details and timelines clearly to borrowers.
Borrowers’ credit history should not be adversely affected if they avail moratorium as per RBI directives.
Banks should provide transparent statements showing accrued interest during the moratorium.
Moratorium periods are usually fixed by RBI for specified durations during financial crises.
Borrowers have the right to choose whether to avail the moratorium, unless otherwise specified.
How to request for a moratorium on a Bajaj Finserv Personal Loan?
To opt for a moratorium on your personal loan from Bajaj Finance, you should raise a request for the same at least 7 days before your EMI due date. There are two easy ways in which you can raise a request.
1. Through our customer portal
- Visit our customer portal to login and authenticate your identity.
- Choose the option of ‘COVID-19 moratorium policy’ from the product - dropdown in the raise a request section.
- Select your personal loan details and read the terms and conditions carefully.
- Submit the request after agreeing to the terms and conditions.
2. Via email
- https://www.bajajfinserv.in/reach-us. Select the Email Us tab and follow the directions to get your query resolved.
Impact on Loan Tenure and EMI
Loan tenure may increase if EMIs are deferred under moratorium.
EMIs might remain the same, but interest accrual increases overall payable amount.
Some lenders allow EMI reduction instead of tenure extension.
Borrowers should check with the lender for customised impact options.
Interest Accrual During Moratorium
Interest continues to accrue on the principal during the moratorium period.
Accrued interest may be capitalised and added to the principal.
EMI post-moratorium may increase to cover accrued interest.
Borrowers can choose to pay interest separately to avoid loan burden growth.
Eligibility for Moratorium
All term loan borrowers, including housing, personal, vehicle, and education loans.
Borrowers must not have defaulted prior to moratorium announcement.
Applicable to loans disbursed before or during the specified moratorium period.
Self-employed and salaried individuals are usually eligible.
Corporate and MSME borrowers may also qualify under RBI directives.
Lenders may have additional conditions for specific loan products.
Borrowers must formally request or opt for moratorium where required.
Opt-in/Opt-out Process
Borrowers must check lender communication for opt-in details.
Typically, a digital or offline request is required to avail moratorium.
Opt-out is allowed if borrowers wish to continue EMI payments.
Lenders provide timelines and formats for submission of opt-in/out requests.
Confirmation of acceptance or rejection is communicated via SMS/email.
Borrowers should retain confirmation for future reference.
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