Even a single prepayment worth a month’s EMI early in your loan can shave off lakhs The moratorium approved by the Reserve Bank of India (RBI) on various loans is a welcome step during the ongoing crisis fuelled by the covid-19 pandemic.
Banks and other lending institutions have already started sharing the operational details of the moratorium. If you’re going through a liquidity problem, the moratorium will ease your passage through this difficult period.
That said, you must also review the long-term consequences of opting for the moratorium. While it will alleviate short-term financial stress, it will increase long-term borrowing costs, making your loan a lot more expensive.