What Should You Know About Home Loans During A Coronavirus Lockdown?

The Government of India has extended the coronavirus lockdown for the fourth time in the country. Coronavirus lockdown has certainly hit the normal expenditure of an individual who has a home loan to reimburse. A 3 months lockdown has already affected the country so much with regards to economic and financial conditions that another period of lockdown may create more worries and financial stress among the public. The government has allowed banks to be operational at the time of this crisis, and they are working for a couple of hours every day and have enormous money to provide loans to the customers. Still, due to coronavirus pandemic, most of the customers are hesitant to step out of their homes. Also, in most of the banks and other financial institutions, loaning activities are not entirely digitized.

This pandemic is acting as a wakeup call for the organizations whose digital operations were working too slow. They are now digitizing their operations and working on zero-contact operations. While the Reserve Bank of India and the Government of India have approached to safeguard people by permitting EMI moratorium on the term loan and partial withdrawal from the EPFO, it may not be sufficient for all or probably won’t be pertinent to all. If you don’t pay the next two monthly installments (EMIs) of your loan, you won’t be blacklisted. However, the bank will charge interest for the unpaid sum. Missing two installments could boost your investment by 6-10 months or increase EMI sum by about 1.5%.

Despite the fact that the points of interest change across banks, borrowers have been given these three choices by loan specialists-

Choice I: The borrower can make a one-time installment in June of the interest that accumulates in April and May.

Choice II: The interest is added to the outstanding loan which will build the EMI for the rest of the months.

Choice III: The EMI is kept unaltered yet the loan tenure is broadened. The quantity of extra EMI will depend on the tenure of the loan.

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Keywords: CIBIL, Credit Report, Credit Score, Home Loan, Moratorium

By: Mohit Bansal

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