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Should you opt for a Moratorium on your loan repayment?

Pros

If you are financially distressed due to COVID-19 situation, a moratorium gives you the choice to defer your loan reypayments for up to 3 months - between March and May 2020. It's simply a deferral on the payment of your Equated Monthlty Instalment (EMI).

Your credit score will not be impacted during the period for which you take the moratorium.

Cons

Deferral of your EMI doesn't mean a payment holiday - interest will continue to accrue on the deferred loan period amount.

So - you will be payingmore interest compared to your current payment schedule. It makes your loan more expensive.

Our advice - don't stop paying your EMIs!

We suggest you avail this moratorium only if you are genuinely affected by the COVID crisis and facing financial difficulties.
Don't stop your loan EMIs unnecessarily.

Here is an example:

  • Amit took a personal loan of ₹50,000 on a 12 month EMI.
  • His EMI is ₹4,631 per month and original total interest to be paid by him is ₹6,736.
  • If Amit decides to take a 3 month moratorium, he will end up paying additional interest of ₹3,473 which is a 50% increase of the original interest amount.

Clearly, Amit can save an unnecessary 50% increase in interest amount by not opting for a moratorium.

Also - paying your EMIs on time improves your credit score and maximises your chances of getting another loan from DMI which means you get a loan when you need it the most.

RBI moratorium is being provided specifically to enable those customers who may be in temporary difficulties for repaying their EMIs. It's not for those customers who can continue to pay their EMIs.

Important FAQs on Moratorium of your loan at DMI Finance pertaining to COVID-19 – Regulatory Package announced by the Reserve Bank of India (RBI) on March 27, 2020

1. What is RBI COVID-19 Regulatory Package Circular on loan EMIs?

In the midst of COVID-19 outbreak, RBI has permitted DMI (a lending institution) to allow Moratorium (deferred/delayed payment) of loan EMIs up to 3 months (1st March 2020 to 31st May 2020).

This means, by opting-in for moratorium –

  • you can defer/delay paying the EMI until 31st May 2020. However, you will have to pay the due EMIs post May 2020 with additional interest.
  • your loan tenure will extend. For example: If your current loan was to end in August 2020 and you have chosen the 3 months exemption, it will now end in November 2020. Additional interest/fee will apply to the EMIs paid in the months of September, October, November 2020.

2. Who is the moratorium meant for?

It is not compulsory for every borrower to opt for the moratorium.

Only those individuals, corporates, SMEs seeking relief due to financial difficulties are expected to opt for the moratorium support (with additional interest/fee).

3. Should I opt for moratorium on your loan repayment?

Please refer to the following illustration to better understand how moratorium works.

Amit took a personal loan of ₹50,000 on a 12-month EMI. His EMI is ₹4,631 per month and the original total interest to be paid by him is ₹6,736. If Amit decides to take a 3-month moratorium, he will end up paying additional interest of ₹3,473 which is a 50% increase of the original interest amount.

So, if you can manage to pay your EMI as per schedule, you will not have to incur extra charges.

4. How does the moratorium help me?

If you are genuinely financially stressed due to the COVID–19 situation, the moratorium allows you a period of upto 3 months in which you do not have to pay your EMIs to DMI. This period extends from 1st March 2020 to 31st May 2020. However, additional interest/fee will be charged on the non-paid EMI amount.

Installments which are overdue prior to 1st March 2020 will be reported to Credit Bureau and RBI as per IRAC (Income Recognition and Asset Classification) norms.

5. How can I opt-in for the moratorium?

If you are under financial stress, you can opt for the moratorium in either ways:

i) Our team at DMI will reach out to you via SMS / Email / Customer Portal to communicate and record your consent on a form.

ii) Alternatively, we have requested channel partners to reach out to you to gather your explicit consent (on a form) for whether you would like to opt-in for the moratorium. You can reach us via channel loan partner / principal loan partner / fintech / any other intermediary institute through which you have received the loan.

6. Are there any eligibility criteria for the moratorium?

You are eligible to apply for the moratorium if you fulfil the following conditions:

i) You have a term loan with DMI whose EMIs fall between March 2020 and May 2020.

ii) Your current outstanding amount with DMI is more than ₹100

iii) You have not already settled (written-off) your loan(s) or are not currently in the process of settlement or do not have only Matured / Cancelled / Closed loans with DMI

iv) Installments which are overdue prior to 1st March 2020 will be reported to Credit Bureau and RBI as per IRAC (Income Recognition and Asset Classification) norms.

7. What happens after I apply to avail the moratorium?

Once you give your consent (to ‘opt-in’ via the form), moratorium of up to 3 months is provided.

Revised Statement of Accounts (SOA) will be shared with all borrowers who opt-in for the moratorium.
A separate communication will be sent regarding this by June 10, 2020.

8. Are there any charges involved in opting-in for the moratorium?

Yes, there are additional charges that will be applicable if you opt-in for the moratorium.

For example - Amit took a personal loan of ₹50,000 on a 12-month EMI. His EMI is ₹4,631 per month and original total interest to be paid by him is ₹6,736. If Amit decides to take a 3-month moratorium, he will end up paying additional interest of ₹3,473, which is a 50% increase of the original interest amount.

For Samsung Device loans, we will charge 2% on the principal outstanding per month for the duration of moratorium availed.

For example - Amit took a Samsung Device loan from DMI Finance for a 5 month EMI. Amit opted in for moratorium for one month, when his principal outstanding pending was ₹10,000. So, Amit will pay ₹200 for a one month moratorium period.

9. What if I have already (advance) paid my loan EMI for April 2020 and wish to opt-in for the moratorium?

If you have already paid your EMI for April 2020 in advance and you wish to opt-in for the moratorium, we will adjust your further repayment schedule.

This updated repayment schedule will be available to you by June 10, 2020.

Kindly Note : The amount that you have already paid to us WILL NOT BE TRANSFERRED BACK TO YOUR ACCOUNT.

The EMI which is paid in advance by the customer will be adjusted for the next due EMI. Below example will help you understand this:

Customers who are not on moratorium -

a) Customer's EMI due date was 5th April and customer paid on 2nd April, then April EMI will get adjusted for April only. If the customer has also paid through NACH, then we will refund the excess EMI.

Customers who are on moratorium -

a) If the customer has opted for moratorium in April (1 month only) and ends up paying the April EMI inadvertently (whether before 5th April or on 5th April or after 5th April till 30th April), the EMI will get adjusted for the April month and not for June EMI.

b) If the customer has opted for 2 months' moratorium and did not pay for April but inadvertently pays for May EMI, then we will first adjust this EMI towards April EMI and not for May or June. This helps the customer to save additional interest which customer would have paid due to moratorium on EMI.

10. I have multiple active loans from DMI Finance which I have availed through different channel partners. Can I opt-in for moratorium for all the loans? Do I need to give separate consent for separate loans?

Yes, you can opt-in for the moratorium against all your loans with DMI Finance, subject to your eligibility. However, you will have to give separate consent (forms) for each loan account you have with DMI.

11. What is the cut-off date for applying for the moratorium?

The cut-off date to apply for the moratorium is Saturday, April 4, 2020 by 07:00 pm (IST). The EMI exemption will not be available after this date.

Those who do not opt-in for the moratorium by Saturday, April 4, 2020 by 07:00 pm (IST) will automatically be considered as customers who wish to pay their EMIs as per schedule.

12. If I opt for the moratorium, do I need to pay all the three months EMI together in June 2020?

Customer can pay the EMI for the moratorium period he or she has selected.

The EMI tenor accordingly will get extended depending on what you choose.

DMI is offering you the flexibility to choose the moratorium for 1 or 2 or all the 3 months. You must choose the period of moratorium in the consent form -

A. One month: I cannot pay my EMI for March 2020 but will resume payment from April 2020. My loan tenure will extend by 1 additional month.

B. Two months: I cannot pay my EMI for March 2020 and April 2020, but will resume payment from June 2020. My loan tenure will extend by 2 additional months.

C. Three months: I cannot pay my EMI until May 2020 and will resume payment from June 2020. My loan tenure will extend by 3 additional months.

Please note that once you opt-in for the moratorium, you cannot reverse it for the period you have selected.

13. If I opt-in for the moratorium now, can I cancel it in the next month or vice-versa? Can I exit the benefit on my own convenience?

Once you have opted-in for the moratorium, you cannot cancel it in the next month. The moratorium will apply for 3 months / 2 months / 1 month basis what you have mentioned in the consent form shared with DMI.

Your decision to opt-in for / opt-out from the moratorium CANNOT BE REVERSED after 4th April 2020.

14. Will I get some waiver or concession in my loan repayments if I don’t opt for the moratorium?

The moratorium is limited to provide support to borrowers who are financially stressed. No waiver or concession will be offered to those borrowers who do not opt-in for the moratorium, however, they will save the additional interest that is levied on people who will take the moratorium.

Installments which are overdue prior to 1st March 2020 will be reported to Credit Bureau and RBI as per IRAC (Income Recognition and Asset Classification) norms.

15. Is giving my consent necessary even if I don’t want to opt-in for the moratorium?

A consent form will have to be carefully read and digitally accepted in both cases –

1. When opting-in for the moratorium

2. When not opting-in for the moratorium

16. I have a Samsung device loan; do I need to inform Samsung Support team separately not to lock my phone if I opt for the moratorium?

No, your Samsung device will not get locked because of non-payment during the moratorium period, provided you have already shared your consent form.

17. Will my Credit Bureau Score get affected if I opt-in for the moratorium now?

No, opting-in for the moratorium will not impact your Credit Bureau Score, provided you read and digitally accept all terms in the consent form by 4th April 2020.

Installments which are overdue prior to 1st March 2020 will be reported to Credit Bureau and RBI as per IRAC (Income Recognition and Asset Classification) norms.

18. What if I do not want to opt-in for the moratorium?

Nothing changes if you do not opt-in for the moratorium. You will continue to pay your EMIs as per the repayment schedule.
In fact, by not opting for the moratorium support, you will help us extend this facility to others who are genuinely needy and financially stressed. For every EMI you pay on time, we will contribute towards feeding the hungry. We will donate part of the EMI you pay to one of the leading NGO’s, www.mcksfood.com which is feeding the poor and migrant labour population who are stranded during this phase and don’t have income to feed themselves and their families. We would highly appreciate your decision.

We will publish on website (with your consent) how much we contributed on your behalf towards feeding the poor.

Should you have any query on loan EMI moratorium/deferment request,
send your query to customercare@dmifinance.in

This is to notify the public that some unscrupulous persons may impersonate employees/representatives/agents of DMI Finance Private Limited (and its associated and group companies) and may have cheated some people. Please contact us if anyone using the DMI name acts suspiciously – for example, asks you to deposit money in the personal account of any individual or asks for a deposit of an advance EMI prior to a loan disbursal.