Car Interior

Car Loans EMIs Suspended till 31st August 2020 (optional)

  • RBI's has extended loan moratorium (suspension) plan for 3 more months on 22nd May 2020.

  • Earlier on March 27, RBI introduced the loan moratorium scheme for three months until 31st May 2020.

  • The balance amount of the EMIs suspended can either be adjusted in the remaining tenure of the loan, or be the loan tenure can be extended by the number of months that you want to avail this benefit.

  • Borrowers have to approach their banks for to opt into this scheme.

  • The moratorium is aimed at easing the burden of paying EMIs and thus preventing loan from becoming NPA (Non Performing Asset).

The Reserve Bank of India granted a much-needed relief to borrowers by giving three months moratorium on EMI payment on all term loans. This will benefit all home loan, car loan and personal loan borrowers as all these loans are considered term loans. However, loans taken against credit card will not be considered as term loans. The move will effectively benefit the car and bike owners who are currently paying EMIs for their vehicles.

RBI Governor Shaktikanta Das said during a press conference that, "This will facilitate the flow of funds at affordable rates and revive animal spirits. With the inflation outlook remaining benign as lockdown-related supply disruptions are mended, the policy space to address growth concerns needs to be used now rather than later to support the economy, even while maintaining headroom to back up the revival of activity when it takes hold."

"All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) (“lending institutions”) are being permitted to allow a moratorium of three months on payment of installments in respect of all term loans outstanding as on March 1, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by three months," the RBI said in a statement.

Banks can now allow borrowers of home loan, car loan, personal loan and corporate loans a three months moratorium on repayment of loan principal and interest. However, the banks and other financial institutions still need to implement this to pass on the benefit to everyone. Once banks & NBFCs implement it, borrowers can approach their lendres for this relief. In such a scenario, the EMI postponement will not be considered as a default and banks will not have to make provision for their non-performing assets. 

One key thing to remember for those looking to avail or extend loan moratorium on their car loans is that the balance amount of the EMI will either be adjusted in the remaining tenure of the loan, or the loan tenure can be extended by the number of months you want to avail this benefit.

The move is aimed to minimize the impact of coronavirus (Covid-19) pandemic and help people have more money to spend. Earlier, on March 27, the RBI had introduced the loan moratorium scheme for the first time for three months. It is scheduled to end on May 31. The decision was taken after several people took to social media requesting the government to take a call in order to ease financial burden at a time when people are facing cash crunch.

Several car makers in India are now taking similar steps to ease the burden on their customers during the coronavirus outbreak. Maruti Suzuki announced a scheme called 'Buy Now, Pay Later' in its bid to inject life into demand that has slumped over the last several weeks of national lockdown. Hyundai Motor has come up with an EMI assurance plan for its customers, while Tata Motors has come up with its own special finance scheme (Keys to Safety) for its customers, and carmakers like Toyota and Skoda are offering zero down payment on new vehicles.

See Cars by Brand

See Cars by Type

See Cars by Price

See Cars by Body Style

Recommended News

Disclaimer: Any and all information provided on this website is not a legal document, is not legally binding, is not a commitment to provide a product or a service, is bound by privacy policy & terms & conditions, is liable to changes retrospectively, and is liable to changes without any prior notice. Please carefully read and understand privacy policy & terms & conditions of a contract before agreeing.

© 2019 - 2021