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Bank of Baroda Loan Moratorium

Bank Of Baroda Loan EMI Moratorium

Last Updated 21st Sep 2021

  • Bank of Baroda loan moratorium is a deferment of EMIs that loan borrowers are obliged to pay at regular intervals.
  • The Bank of Baroda moratorium period is of six months, beginning from March 1, 2020 and continuing up to August 31, 2020.
  • Bank of Baroda is offering the moratorium on home loans, auto loans, personal loan and credit cards.
  • The moratorium will generate additional interest and extended tenure.

What is Bank of Baroda Loan Moratorium?

The current pandemic, Covid-19, has put us all in a state of the financial crisis. While the authorities are trying to help people cope with the situation, RBI has come up with a scheme to relieve the loan borrowers from their financial burden of EMIs. RBI has announced a moratorium for the loan borrowers. As announced by the RBI, Bank of Baroda has earlier announced a moratorium of three months, starting from March 1, 2020, and continuing up to March 31, 2020. The bank has further extended the moratorium for another three months, dating from June 1, 2020, to August 31, 2020.

By opting for the moratorium, loan borrowers will no longer be obliged to pay their EMIs during the moratorium period. However, the moratorium is not a complete concession on the EMIs. It is just a deferment of the EMIs. Hence, availing the moratorium will not suspend the EMIs completely. Once the moratorium period is over, the loan borrowers will be obliged to resume the payment of their EMIs.

Loan borrowers from Bank of Baroda can avail the loan moratorium to delay the payments of their EMIs for a selected period of time. However, the moratorium scheme will have a few consequences that one needs to keep in mind. Loan borrowers can avail the benefits of the moratorium up to August 31, 2020. From September onwards, the EMI payments will return to the previous schedule.

Who should opt for Bank of Baroda Loan Moratorium?

Loan borrowers going through financial crises due to the pandemic and failing to pay their EMIs should opt for Bank of Baroda loan moratorium. By opting for the moratorium, loan borrowers can delay the payments of EMIs until their financial stability has been restored. By opting for the moratorium, borrowers can also avoid late charges.

Who should not opt for Bank of Baroda Loan Moratorium?

Individuals who have managed to keep their financial stability and can continue to pay their EMIs should restrain themselves from availing the moratorium. As stated earlier, a moratorium is a mere delay, not a complete waive off. Therefore, you will have to continue paying the EMIs once the moratorium period is over. Moreover, if you opt for the moratorium, you will face additional interest.

How to avail Bank of Baroda Loan Moratorium?

You can avail the Bank of Baroda loan moratorium in the following ways.

  • Send a mail to the bank from your registered mail id or give a call from your registered mobile number to request the moratorium.
  • The bank is in the process of sending messages to the loan borrowers for the moratorium.
  • As of now, the bank has no online process for requesting loan moratorium.

However, if you are able to pay the EMIs on time and are not willing to take any moratorium, no further action is required from you. You can carry on with your EMI payments, as you did so far. While requesting the moratorium, keep in mind that Bank of Baroda is offering moratorium to loan borrowers having a maximum outstanding of ₹ 10,00,000. Loan borrowers with an outstanding amount of more than ₹ 10,00,000 are required to request the moratorium at the bank. The first moratorium period was from March 2020 to May 2020. Currently, the bank is offering moratorium for June, July and August 2020.

What happens if you opt for Bank of Baroda Loan Moratorium?

The moratorium is a scheme to reduce the financial burden of loan borrowers by postponing the EMIs payment. By opting for the moratorium, loan borrowers can take a break from paying their EMIs for the selected period of time. When the moratorium period gets over, the loan borrowers will be required to start the payment for the EMIs. During the moratorium period, interest will keep accumulating and will be added to the outstanding amount of EMIs. Moreover, the tenure of your loan will be extended. The moratorium period can be of a maximum of six months; however, the moratorium period does not have to be of a full six months.

Impact of Bank of Baroda Home Loan EMI Moratorium

Loan borrowers of Bank of Baroda can request a moratorium on their home loans. You can be free from the obligation of paying their EMIs for their selected moratorium period by opting for a home loan moratorium. However, you must start your EMI payments as soon as your moratorium period is over. Furthermore, you will be required to pay the additional interest accumulated during the moratorium period along with your remaining EMIs. The loan tenure will be extended as well. To request a moratorium, send your bank mail or give them a call. Below goes an illustration for a better understanding of how Bank of Baroda home loan moratorium works.

For instance, on May 1, 2018, you had taken a home loan of ₹ 40,00,000 at the interest rate of 14% with tenure for 72 months. Therefore, your EMI is ₹ 82,423. Suppose, till April 30, 2020, you have regularly paid EMIs. Hence, you have paid 24 EMIs, and 48 EMIs are pending. On May 1, 2020, you decided to opt for a moratorium of four months. In this scenario, the interest part in the EMIs for May, June, July, and August was:

Months Interest Amount
May ₹ 35,189
June ₹ 34,638
July ₹ 34,081
August ₹ 33,517

So, the total interest due to the holiday period would be ₹ 1,37,425. The revised outstanding principal amount after the capitalization of interest due during the moratorium period would be ₹ 31,53,656. The remaining tenure on Sep 1, 2020 would be 48 months, and the revised EMI would be ₹ 86,178.

Therefore, it means that after availing moratorium period, the interest you were supposed to pay during those months would be added in your outstanding loan amount. Plus, after the moratorium, the loan tenure will be the same as it was at the start of the moratorium period, and the EMI would be revised based on the updated outstanding loan amount.

The moratorium period is not compulsory to be for four months. You can select a moratorium period of less or more than four months. Remember, the additional interest and extended tenure depend on the selected moratorium period.

Impact of Bank of Baroda Auto Loan EMI Moratorium

Auto loan borrowers of Bank of Baroda are eligible for loan moratorium. They will have to contact the bank for availing the moratorium. Once the loan borrowers have opted for a moratorium, they can stop paying EMIs for the selected moratorium. IN the moratorium period, the interest will keep accruing. After the period ends, they will be required to start paying for the remaining EMIs along with the additional interest. The tenure will be extended. For a better understanding of the auto loan, here is an illustration.

For instance, on June 1, 2017, you had taken an auto loan of ₹ 8,00,000 at the interest rate of 12% with tenure for 48 months. Therefore, your EMI is ₹ 21,067. Suppose, till May 31, 2020, you have regularly paid EMIs. Hence, you have paid 36 EMIs, and 12 EMIs are pending. On June 1, 2020, you decided to opt for a moratorium of three months. In this scenario, the interest amount for June, July and August were:

Months Interest Amount
June ₹ 2,371
July ₹ 2,184
August ₹ 1,995

So, the total interest due, for the holiday period would be ₹ 6,550. The revised outstanding principal amount after the capitalization of interest due during the moratorium period would be ₹ 2,43,661. The remaining tenure on September 1, 2020, would be 12 months, and the revised EMI would be ₹ 21,649.

Therefore, it means that after availing moratorium period, the interest you were supposed to pay during those months would be added in your outstanding loan amount. Plus, after the moratorium, the loan tenure will be the same as it was at the start of the moratorium period, and the EMI would be revised based on the updated outstanding loan amount.

The moratorium period is not compulsory to be for three months. You can select a moratorium period of less than or more than three months, but no more than for six months. Remember, the additional interest rate and extended tenure depend on the selected moratorium period.

Impact of Bank of Baroda Personal Loan EMI Moratorium

Bank of Baroda is offering personal loan EMI moratorium at the same terms and conditions as home loans and auto loans. Loan borrowers select a moratorium period and enjoy the postponement of EMIs. When the moratorium period ends, the loan borrowers will be asked to resume the EMI payments and the interest accumulated during the moratorium period will be added to the outstanding principal. The moratorium will result in an extended tenure as well. The following is an illustration of how personal loan EMI moratorium works.

For instance, on March 1, 2017, you had taken a personal loan of ₹ 13,00,000 at the interest rate of 10% with tenure for 48 months. Therefore, your EMI is ₹ 32,971. Suppose, till February 29, 2020, you have regularly paid EMIs. Hence, you have paid 36 EMIs, and 12 EMIs are pending. On March 1, 2020, you decided to opt for a moratorium of six months. In this scenario, the interest amount for March to August was:

Months Interest Amount
March ₹ 3,125
April ₹ 2,877
May ₹ 2,826
June ₹ 2,373
July ₹ 2,118
August ₹ 1,861

So, the total interest due, for the holiday period would be ₹ 14,980. The revised outstanding principal amount after the capitalization of interest due during the moratorium period would be ₹ 3,89,983. The remaining tenure on September 1, 2020, would be 12 months and the revised EMI would be ₹ 34,286.

Therefore, it means that after availing moratorium period, the interest you were supposed to pay during those months would be added in your outstanding loan amount. Plus, after the moratorium, the loan tenure will be the same as it was at the start of the moratorium period, and the EMI would be revised based on the updated outstanding loan amount.

The moratorium period is not compulsory to be for six months. You can select a moratorium period of less than six months. Remember, the additional interest and extended tenure depend on the selected moratorium period.

Impact of Bank of Baroda Credit Card EMI Moratorium

Credit cardholders of Bank of Baroda can request for a moratorium on their credit card payments and on credit card loans.

In case of credit card monthly bills, cardholders always have the option of just paying the minimum balance due and carry the remaining balance to next month. However, if you do not want to pay even the minimum balance, then the complete balance will be carried from month to month till the end of the moratorium period. As per the communication of Bank of Baroda, you can avail moratorium period if your previous month’s credit card bill does not state ‘IMMEDIATE’ under the ‘Payment Due Date’ section. During the moratorium period, your credit card balance will continue to attract interest along with your further purchases.

Since the rate of interest on the credit card is high, it is strongly recommended to continue paying the dues so that you can avoid paying a high amount of interest later on.

In case of credit card loan, the moratorium will work similarly as loan types. So, for instance, on April 1, 2019, you had taken a credit card loan of ₹ 3,00,000 at the interest rate of 20% with tenure for 24 months. Therefore, your EMI is ₹ 15,269. Now, until May 30, 2020, you have regularly paid EMIs. Hence, you have paid 14 EMIs, and 10 EMIs are pending. On June 1, 2020, you decided to opt for a moratorium of six months. In this scenario, the interest amount from June to August was:

Months Interest Amount
June ₹ 2,326
July ₹ 2,111
August ₹ 1,891

So, the total interest due, for the holiday period would be ₹ 6,328. The revised outstanding principal amount after the capitalization of interest due during the moratorium period would be ₹ 1,45,904. The remaining tenure on Sep 1, 2020, would be 10 months and the revised EMI would be ₹ 15,961.

Therefore, it means that after availing moratorium period, the interest you were supposed to pay during those months would be added in your outstanding loan amount. Plus, after the moratorium, the loan tenure will be the same as it was at the start of the moratorium period, and the EMI would be revised based on the updated outstanding loan amount.

FAQs

Can I request the moratorium online?

The Bank of Baroda is not providing any online facility for requesting moratorium as of now. You can opt for the moratorium by sending a mail or by calling the bank.

Will I get any refund if I opt for the moratorium after the EMI has been debited from my account?

Yes, you can get a refund if you opt for the moratorium after the EMI has been debited from your account. Inform the bank, and they will process the refund.

Will the bank automatically stop debiting EMIs?

The bank will continue debiting EMIs from your account if you have not requested the moratorium.

I am not willing to opt for the moratorium. What should I do?

If you are not willing to opt for the moratorium, no action is required from you. Keep paying the EMIs regularly.

Will there be any late charge during the moratorium period?

If you have opted for the moratorium, there will not be any late charges. However, if you have not opted for the moratorium, you will be charged late fees.

Will the moratorium period accumulate interest if I opt for the moratorium?

Yes, interest will keep accumulating during the moratorium period, even if you opt for the scheme. The accrued interest will be merged with your outstanding amount.

Does the moratorium apply for credit cards that are under the settlement?

Credit cards under the settlement are not eligible for Bank of Baroda moratorium.

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