Personal Loan

FAQs About the COVID-19 Moratorium on Personal Loans


Many people faced money-related issues despite having a secure job and have started thinking more before spending a few rupees. This article will give insight into a scheme that the Reserve Bank of India (RBI) has come up with to give people some relief from loans during the COVID-19 pandemic.

Living through COVID has not been easy for any of us, most of us have faced grief. The money position in India has seen a similar fate, with many disruptions. As a result, the RBI took many relief measures to aid people in dealing with the money crisis. Banks needed to give their customers a 6-month EMI moratorium.

The article aims to inform its readers of all that they need to know about the COVID-19 moratorium on personal loans. The article covers what such loans under COVID-19 are, their perks, the criteria for getting these loans, how a person can apply for such a loan, and vital queries and answers related to the same. 

Relief Measures Under the COVID-19 Moratorium:

  1. Ease of opting out: Since the COVID-19 moratorium on personal loans is not a mandate for all, one can choose to opt out of them at any given point in time. 
  2. Deferred EMI: In the event that one chooses to opt out of a moratorium loan, EMI dues get deferred. The time for which they are deferred varies from one bank to another, but usually, banks defer EMI payments for up to 6 months. 
  3. Extension for loan repayment: The loan repayment period can also be extended, based on the loan term.
  4. Some banks also offer to return the amount paid for the EMIs paid in the past.  Eligibility Criteria for Moratorium Personal Loans

The criteria followed for COVID-19 moratorium personal loans in as follows: 

  1. This applies to all Personal Loans taken out before March 1, 2020.
  2. The bank will check any overdue loans taken before March 1, 2020. If it so happens that one applying for a Covid-19 Moratorium Personal loan has passed overdue, then this decision will be taken by the bank. 

How to Apply for Covid-19 Moratorium Personal Loans


Most banks give the choice of walk-in personal loans or online requests for loans, these two cases are as follows:

  1. Offline: One can easily call the customer care number of the bank they wish to take a loan from and speak to the bank. Also, they can visit the bank’s branch and clear all their doubts. 
  2. Online: They can visit the bank’s website and pick the option to get an EMI on their loan account. They must enter their mobile phone number and an OTP to apply for the same.

Also, people can submit a request by sending an SMS to the bank. 

It is clear that if people choose to opt for an EMI, then they will have to pay a huge amount of extra interest. If they can make regular loan payments, and strive to avoid the moratorium, it will save them a lot of money.

Personal Loan Frequently Asked Questions 

  1. How do I know if I am eligible for a personal loan?

To get a personal loan, one must have a regular source of income. It does not matter if they are professionals, salaried employees, or business owners; they must have a source of income. Also, their eligibility will depend on other factors such as the firm that they are working at, their credit history, their house, and some other factors. 

  1. What is the maximum loan amount?

In the case of a salaried person, the loan amount is not predetermined, but the bank ensures that the EMI does not exceed 30% to 40% of the person’s take-home pay. Any loans that the individual has are also considered when determining the personal loan amount.For self-employed ones, the loan value is decided using the most recent profit or loss in their firms, and if the person has any current loans or money to be repaid.

  1. What is the tenure of a personal loan?

Personal loans usually last for 1–5 years. In some cases, the tenure of the personal loan may vary. 

  1. What documents are needed to apply for a personal loan?

The documents needed to take personal loans differ from one bank to another, but there are some documents such as:

  1. Income proof 
  2. Address proof
  3. ID proof
  4. The copies of degree or license (in the case of a self-employed)  
  5. What are the prevailing rates for personal loans?

The interest rates for personal loans are usually high as these are unsecured loans. Currently, personal loans are offered at interest rates of 10.25%.

  1. Is it possible for me to raise a request for a moratorium on my account?

Yes, they can raise a request via their account by just visiting the website of their bank.

  1. How will my loan be treated after the moratorium period ends?

The tenure of the loan will extend as the rate of interest is added to the total interest payable and principal due during the loan period.

  1. Is it possible for me to make payments during the moratorium period?

One does not need to pay during the tenure of the moratorium. But, they may make advance EMI payments if the terms of their plan require them to do so. 

  1. Am I required to submit any documents?

One may need to submit a NACH debit mandate. 

  1.  How many days before the due date should I be raising a request for the moratorium?

One must submit a request at least 7 days before the due date for their loan EMI.

The Bottom Line

The COVID-19 Moratorium on Personal Loans by the RBI has saved the nation from a money crunch by proving to be a saving grace to the people of the nation. It is an ideal way to get a personal loan that is sure to help in times of need. Visit Piramal Finance to learn more about such services and to find answers to all your loan-related queries.