The ZestMoney guide to navigating through the RBI moratorium & extension
On March 27th 2020, the Reserve Bank of India (RBI) announced a moratorium on retail terms loans to relieve repayment pressures brought on by the disruptions caused by the COVID-19 pandemic. The RBI vide its notification dated May 23, 2020 (Moratorium Extension Notification) allowed lenders to extend the moratorium by an additional 3 months (i.e. until August 31, 2020) at their discretion. This means that lenders can now extend the moratorium availed before May 31st, 2020, by another 3 months, wherever necessary.
For clarifications on the moratorium extension, please click here
As you are aware, ZestMoney is a facilitator between our lending partners and you, our customer, so the process of taking a loan is more convenient and efficient. The lending partner who you’ve availed a loan from is mentioned in your loan agreement and can differ for each loan you have availed using ZestMoney.
This is a guide to help you understand the intricacies of the moratorium and the extension as per RBI guidelines as put in place by our lending partners. It is a broad overview of the policies our lenders are following with regard to the implementation of the moratorium and how it affects you. You must bear in mind that the final decision on granting the moratorium to you can only be made by your lender.
To view a full list of our lending partners and their policies, please click here.
What is a moratorium?
A moratorium is simply the temporary suspension or delay of an activity or practice. In this case, it basically means that, should your financial situation not allow you to pay, you have the option to defer/postpone payments for your loans and EMIs.
How does the moratorium work?
Is this a waiver or a deferment?
This moratorium is not a waiver, but a deferment. Your EMI plan will simply be extended for the period of the moratorium, with interest accruing for the duration of the moratorium as per the guidelines announced by the RBI on 27th March, 2020.
Will the moratorium allow me to defer the entire amount, including interest and principal, or is there a minimum amount I will have to pay?
The moratorium will enable you to defer the entire amount payable – interest and principal – however, these will be due and payable again after the moratorium period comes to an end (i.e. May 31, 2020). According to the RBI circular, if the moratorium is availed, there will be additional interest charged at the same rate for the period that it is availed.
If I take a loan after 1st of March will I be eligible for a moratorium?
The moratorium may be available in respect of all loans availed on or before March 26, 2020. Based on the policies of your lender, you are not eligible for the moratorium for loans availed after March 27, 2020.
Will my loan payments be considered under moratorium by default or will I have to apply to defer my payments?
Your loan payments will not be deferred by default. If you would like to avail or extend the moratorium scheme, please reach out to your lender through our customer service team at +91 6269000097 before June 10th, 2020.
If you have any doubts or questions, please write to us at firstname.lastname@example.org .
Will I certainly get the benefit of the moratorium?
No. The final decision of granting the moratorium to you lies with your lender.
What should I do if my request for a moratorium is not approved?
Will my due date be the same?
Can I take new loans and what will be the due date of the new loan?
If you are deferring your payments under the moratorium scheme, you will not be able to apply for new loans using ZestMoney until all outstanding EMI payments are made since your credit limit will be frozen during this time.
If you keep making your EMI payments as scheduled, you will be able to apply for new loans up to your credit limit. The first payment date of any new loan you take will be one month after the purchase, as usual.
Will my EMI due date change and, if so, what will be the new due date of my loan?
If your lender has granted the moratorium to you, the original date of your EMI payment wouldn’t change but the month will. Your EMIs will now become payable after the moratorium ends. For example, if you opted to avail the moratorium until the end of May for an EMI payment that is due on April 5th, the new date will be June 5th. However, should this happen to change, we will notify you well in advance.
Will my loan go into default?
No, it will not. Your EMI plan will simply be extended by the period for which you avail the moratorium.
Will there be a late fee charged if I opt for the moratorium scheme?
No. As per RBI policy, no late fee will be charged for the duration of the moratorium.
What happens to my CIBIL score?
Will my CIBIL score be affected by this?
No, your credit score will not be affected, since this moratorium is authorized by the Reserve Bank of India.
If my CIBIL score is affected negatively as a result of deferring my payment, who will take care of the correction?
The RBI has directed that your CIBIL score should not be affected by this. Should there be an error in your credit report or an impact on your CIBIL score as a result of deferring your payments, do let us know so ZestMoney can work with the lender and the credit bureau to get this error corrected.
What about payments?
How do I pay my EMI during the lockdown?
As ZestMoney has always been a digital-first company, you will have online payment options available to you, as usual. You can log in into the ZestMoney app/website and make payment by clicking the Pay EMI link next to each active loan in the EMI section under My Account or using the link that we send you.
Will you continue to auto-debit the amount from my bank account using my NACH mandate during the moratorium period?
Based on instructions from your lender, we will be automatically debiting your EMI payments for your lender from your account, unless you have opted in for the moratorium.
Can I still pay manually using the various options provided?
Yes, you can. In order to make your EMI payment manually, you can visit the My Account section by logging in to your ZestMoney account using the mobile app or website. Under EMIs, you can click on the Pay EMI link next to each active loan in order to make your payment manually.
Can I make partial payments during this time?
Even if you have opted to take benefit of the moratorium, you will still be able to make partial payments of your EMIs during this time by visiting the My Account section by logging in to your ZestMoney account. Under EMIs, you can click on the Pay EMI link next to each active loan in order to make your payment manually.
Will I be allowed to make payments during the moratorium period? If I make payments during the moratorium period, is there an incentive for me?
Yes, you will still be able to make your EMI payments during this time. Good repayment behaviour always results in incentives in some form. Here are some pros to paying your EMIs as scheduled:
- You stand a chance to win direct cashbacks for timely repayments of your EMIs, as well as exciting scratchcards on a regular basis.
- You will be able to take additional loans up to your credit limit.
- You will be eligible for a Credit Line increase in the future, as well as exclusive offers.
- You get to save all the money that you would otherwise pay as interest accrued during the moratorium.
Keep a lookout for more amazing offers and incentives in the My Accounts section of the ZestMoney app/website!
Is there a way to make the EMI payment with a credit card?
No, we are not permitted to collect your EMI payment with a credit card.
Do I have to pay all of my pending EMI payments in one-go after the moratorium?
As per RBI guideline, your interest will accrue during the moratorium. Based on instructions from your lender, we will be collecting the entire accrued interest along with your first EMI payment after the moratorium is over. After the first EMI payment post moratorium along with your accrued interest, you will be able to make payment in monthly instalments through ZestMoney as usual.
Will I still be eligible for interest cashback on my 0% EMI loans if I opt to not pay during the moratorium?
If you are availing the moratorium scheme, you will no longer be eligible for cashback on a 0% EMI.
Loans taken with certain EdTech partners will not be receiving cashback during the moratorium. Once your EMI payments resume after the moratorium ends, you will continue to receive your cashback. As guided by the RBI, you will also be charged accrued interest for the duration of the moratorium.
Will I be charged any penalty if I opt to defer my EMI payment during this time?
No, you will not be charged any penalties or fees for deferring your payments under the moratorium scheme.
Will I be charged interest for the moratorium period?
Yes. As per the RBI’s guidelines, you will be charged interest during the moratorium. This interest will be accrued and collected along with the first EMI payment you make after the moratorium ends.
Will my interest rate be the same during the moratorium?
Your interest will continue to accrue at the same interest rate during the moratorium. Since deferring your payments results in an extension of your EMI tenure, you will end up paying more money towards interest than you would have in the absence of a moratorium.
i.e. If you bought a ₹24,000 phone on a 6-month EMI, your EMI amount would be ₹4,600. If you opt for the moratorium, you will end up paying an additional ₹1,080 in interest by the end of your extended 3-month tenure, which is an additional 50% over the interest you paid. This is simply a result of your original loan being extended by 3 months to a longer tenor. This amount obviously increases if you choose to extend your moratorium.
Does the moratorium alter any of the terms and conditions in my loan agreement?
Only the repayment schedule of your loan(s) will be altered to reflect the moratorium scheme. All other terms and conditions of your loan agreement with your lender remain the same.
Will there be any extra grace period given to make the EMI payments after May 31, 2020?
The moratorium is an extension permitted by the RBI to help people manage their finances in this difficult time. As per the RBI’s recent announcement, this moratorium period is now extended until August 31, 2020. To avail an extension of the moratorium until August 31, 2020, you must reach out to the ZestMoney Customer Service team at +91 6269000097 before June 10, 2020.
You must bear in mind that the extension of your moratorium is not guaranteed. Based on instructions from your lenders, we may ask you to re-pay a small amount of money and/or submit some documents to help us/your lender understand your finances and the stress caused by COVID-19.