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Extension of EMI moratorium: Be mindful of the high interest burden

Interest will continue to accumulate during the period, as it is a deferment and not a waiver

May 22, 2020 / 21:11 IST
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Borrowers now have three more months to pay their equated monthly instalments (EMI). The Reserve Bank of India (RBI) on Friday announced an extension of the loan repayment moratorium to borrowers – originally rolled out in March – up to August 31, 2020.

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As per industry estimates, around 25 per cent of the borrowers have opted for the moratorium facility. Given that the impact of the novel Coronavirus Disease-induced nationwide lockdown will continue to be felt in the next few months, it is likely that many would opt for the extension too.

Interest to pile on