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SBI Loan Moratorium

SBI Loan EMI Moratorium

Last Updated 26th Sep 2021

  • SBI loan moratorium is a postponement of the EMIs that a borrower is bound to pay every month.
  • The State Bank of India is offering a loan moratorium for six months, that began from March 1, 2020, and is up to August 31, 2020.
  • The loan moratorium can be availed across loan products like home loans and auto loans, amongst others.
  • Availing SBI loan moratorium will lead to additional EMI payments and will lead to an increase in loan tenure since the repayment schedule is postponed.

Watch Video to Apply for SBI's Restructuring Scheme

What is SBI Loan Moratorium?

Currently, COVID-19 has put things in a state of financial distress as every social, economic and financial activity has come to a halt. However, the authorities have ensured certain measures to keep things under control. Thereby, as per RBI regulations, the State Bank of India has decided to defer the loan EMIs on term loans for six months. This means that loan EMIs obliged to be paid from March 1, 2020, to August 31, 2020, have been allowed a Moratorium period. This means that during the moratorium period, SBI loan borrowers are not subjected to pay their monthly EMIs. However, it must be remembered that loan moratorium is EMI holiday or absentia, and thereby, just a postponement of EMI payments and not an EMI waive off. Therefore, borrowers are subjected to pay the EMIs with the interest as and when the moratorium is over.

Also, availing the loan moratorium is a voluntary choice of the loan borrower, and may or may not be availed by the borrower as per his or her convenience. Thereby, SBI ensures collecting the consent of all loan borrowers who wish to avail or not avail the loan moratorium, through a simplified process. The bank offers the below-mentioned options to its customers:

To not opt for the SBI loan moratorium: If a customer is financially able to manage his expenses and finances well even during the lockdown period, then it is advisable and also possible for him or her not to avail the EMI moratorium. For this, no action is required, and one may continue paying his or her loan EMIs.

To opt the SBI loan moratorium: SBI loan moratorium is a convenient option to go for, in case one is in a financially difficult situation. Thereby, one can save themselves from paying the EMIs until the financial balance is restored. The loan moratorium can be availed through two ways:

  • Through standing instructions: SBI collects an automatic response through the VMN or the virtual mobile number. For this, one is required to SMS reply to the VMN within five days from the day when the SMS is received on the customer’s registered number.
  • Through NACH: NACH stands for National Automated Clearing House implemented by the National Payments Corporation of India (NPCI) that allows banks and financial institutions to conduct repetitive and periodic financial payments. Loan EMIs and interests are collected through NACH, thereby to stop the automatic deductions of EMIs one needs to notify the bank of the same. For this, one is required to send an SMS reply to the virtual mobile number (VMN) within five days when one receives the SMS. Here ‘1234’ is the last four digits of the loan borrowers SBI loan A/C number.

However, the consent for SBI loan moratorium through the above ways can be availed only when loan borrowers’ registered mobile number is active and can receive SMS updates. In case the mobile number of the loan borrower has changed during the loan, then he or she might not receive the SMS update. In that case, if one wishes to opt the loan moratorium, then they can contact their nearest bank branch and fill in the loan moratorium request form Annexure-1.

What happens if you opt for an SBI loan moratorium?

It must be kept in mind that the loan moratorium is a delay in the payment of the loan EMI, and not a complete waive off of the EMI payment. Also, during the loan moratorium period, the interest will be accrued on the outstanding amount of the term loan. The impact of the loan moratorium on home loans and car loan has been listed below with illustrative examples:

Impact of SBI Home Loan EMI Moratorium

In case a person opts for a SBI Home Loan moratorium of six months on SBI home loan, then he or she will be obliged to pay the EMIs with additional interest rates. Also, availing the loan moratorium will lead to additional EMI payments after the loan moratorium period is over. The moratorium will also lead to an increase in loan tenure since the repayment schedule is postponed.

For instance, if a home loan is availed for an amount of ₹ 30 Lakh at 8% rate for 20 years, that is entitled to a remaining maturity of 15 years, then one would end up paying an additional interest of ₹ 3.95 Lakh (approximately) that would be equivalent to 16 additional EMIs. If one decides to change the EMI amount and keep the tenure same, then the monthly EMI amount will change from ₹ 25,093 to ₹ 26,113 and the additional interest to be paid is ₹ 1.83 Lakh.

Impact of SBI Auto Loan EMI Moratorium

In case a person opts for a SBI car loan moratorium of six months on SBI auto loan, then he or she will be obliged to pay the EMIs with additional interest rates. Also, availing the loan moratorium will lead to additional EMI payments after the loan moratorium period is over. The moratorium will also lead to an increase in loan tenure since the repayment schedule is postponed.

For instance, if a car loan is availed for a number of ₹ 6 Lakh at an interest rate of 8.5% for a tenure of 5 years, that is entitled to a remaining maturity of 54 months, then one would end up paying an additional interest of ₹ 35,655 that would be equivalent to 3 additional EMIs. If one decides to change the EMI amount and keep the tenure same, then the monthly EMI amount will change from ₹ 12,310 to ₹ 12,842 and the additional interest to be paid is ₹ 28,756.

Impact of SBI Personal Loan EMI Moratorium

In case a person opts for a SBI personal loan moratorium of six or fewer months on SBI personal loan, then he or she will be obliged to pay the EMIs with additional interest rates. Also, availing the loan moratorium will lead to additional EMI payments after the loan moratorium period is over. The moratorium will also lead to an increase in loan tenure since the repayment schedule is postponed.

For instance, if the SBI personal loan is availed for an amount of ₹ 6 Lakh at an interest rate of 12% per annum for 5 years that is entitled to a remaining maturity of 4 years, then one would end up paying an additional interest rate of ₹ 25,476 by opting an EMI deferment of three months.

Impact of SBI Credit Cards EMI Moratorium

In case a person opts for a loan moratorium of six or fewer months on an SBI credit card, then he or she will be obliged to pay the credit card EMIs with additional interest rates. Though the credit card holders must remember that availing the EMI moratorium is just a postponement of the EMI but not a complete waive off, and thereby once the moratorium period is over, one is required to pay the complete outstanding balance together with interest accrued.

In addition, the SBI credit card moratorium can be availed by the credit cardholders who ensure making regular payments and have no overdue balance. Such credit cardholders who have been regular, but now wish to avail the deferment can either stop making the credit card bill payment or can stop the auto-debit/ECS facility. However, as and when one avails the deferment, he or she will be required to pay the entire amount inclusive of the outstanding balance and interest accrued, on the next due date of the credit card bill payment that falls after the moratorium payment is over. The credit card bill payable on this date won't include the late payment fee, but the residual GST will be charged.

FAQs

Is there any additional charge required to be paid to avail the SBI loan moratorium?

No, there are no additional charges that one needs to pay to avail deferment of EMIs.

Can SBI loan moratorium be availed across all loan products?

Yes, loan moratorium can be availed across all term loans and overdraft facilities including home loan max gain, car loans, education loans and personal loans.

Is there a complete waive off of EMIs as per loan moratorium?

SBI loan moratorium is not a waive off of the EMIs, but a postponement or deferment of payments. Loan borrowers are obliged to pay the EMIs once the moratorium period is over.

How can one apply for an SBI loan moratorium through the standing instruction?

SBI will send a message to seek the customer’s consent regarding the loan moratorium. The message is sent through a VMN or a virtual mobile number if you wish to avail the moratorium facility reply with ‘YES’ within five days of receiving the SMS.

Is it compulsory to avail SBI loan moratorium?

No, availing SBI loan moratorium is no compulsion. It is a voluntary choice of the loan borrower to opt it or to continue paying the EMIs.

Can I apply for an SBI loan moratorium on multiple loan accounts?

Yes, you can avail SBI loan moratorium even when you have more than one loan account. SBI loan moratorium can be availed across all loan accounts.

Will deferment of EMI impact my credit score?

No, availing the EMI deferment will not impact your credit score in any way.

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