Will Moratorium Affect Your Personal Loan Eligibility? Explained in Easy Points

 

RBI’s EMI loan moratorium came as a bitter-sweet relief for the self-employed and salaried individuals after a terrible economic crisis amidst the lockdown. Out of three individuals, one has opted for the initial moratorium to settle down the finances. It was taken up by individuals with auto loans, personal loans, home loans, and credit card loans too. Starting from March 2020 to August 2020, many had undergone the moratorium to bring some relief to their financial condition. As per the guidelines, the credit rating or credit score would not be affected during this period, if an individual does not pay his or her EMI or debt. This was done to garb the bad economic condition in the country amidst job losses and salary cuts. However, this moratorium was not a good idea, as it had shown more negative impact than anything positive.

 

Did moratorium affect credit score?

No, the moratorium did not affect the credit score. To understand things better, you need to understand that how they worked. The Moratorium period started from March 2020 to August 2020. During this period the banks allowed the customers to avoid or ignore paying the EMI, bills and make any payment. Non-payment or missed payments during this session would not be added as negative to their credit record and it not has any impact on their credit score. This was the advantage why one out of three people opted for the moratorium. Amidst the job losses and terrible economic condition, paying EMI and bills were not possible for a good percentage of people. This has helped them to keep the EMI away for the months and focus on the necessary and the fixed obligations rather. Since your credit score or record will not be affected, your personal loan eligibility does not affect you.

 

Was it a good idea?

A moratorium was a sweet poison. It did some good by shifting the EMI payment for few months at the time of crisis. But this had become more expensive, due to the added rate of interest. It was not a waiving off the EMI or any amount from the loan, so when individuals started paying they had to pay the EMI for the same month along with moratorium month interest. This became a burden for many to make a high payment from August.

 

Wrapping up

The moratorium did not allow any negative impact on an instant personal loan. The credit score of the individuals was not affected, and this was the only reason why it became a popular relief.