Details of COVID19 Moratorium Program

The Central Government in coordination with State Governments have imposed a lockdown across the country in order to contain the spread of the Covid-19 virus. This has impacted the livelihoods of our customers across various segments. RBI, in its notification dated 27^th March 2020 (Ref: RBI/2019-20/186), has permitted Housing Finance Companies to offer a “COVID19 moratorium of 3 months on payment of all instalments falling due between Mar 1, 2020 and May 31, 2020”.

In the above context, we are offering the following COVID19 Moratorium Program to our customers. The key terms of this program are as follows:

1. All salaried and self-employed individual and non-individual borrowers (including proprietorships, partnership firms and private limited companies) across all products having outstanding loans as of 1^st Mar 2020 will be eligible for the COVID19 Moratorium Program
2. Moratorium is available on payment of instalments falling due between 1^st Mar 2020 and 31^st May 2020. If a payment was due prior to 1^st March 2020, moratorium is not available on them. [Note: The past due days on payments that were overdue on 1^st March 2020 will continue to move up.]
3. The customer has to provide his/her consent for the COVID19 moratorium and related repayment plan. Click here for consent form
4. Customers who have requested for the moratorium but want to clear their EMIs for April/May can do so by sending a request to cancel their COVID19 moratorium application. Click here for cancellation form
5. Customers who have cleared their March and April EMIs can opt for the COVID19 Moratorium Program for May EMI.

Mechanics of the program and impact on customer:

 [For purpose of discussion, we will refer to a sample customer transaction:

Loan Amount: Rs. 10 Lakhs

ROI: 13.50%

EMI: Rs. 12,074

Original loan tenure: 240 months

Balance loan tenure: 200 months (starting from April, 2020 and ending in Nov, 2036)

The customer has already cleared his 4^th March EMI]

The above customer will pay an EMI of Rs 12,074 on 4^th April and 4^th May in the normal course. These EMIs consist of interest component of Rs 10,784 and Rs 10,770 and principal component of Rs 1,291 and Rs 1,305 respectively. However, we propose to offer a COVID19 Moratorium Program

6. Under this program, customer will not pay any EMI/Interest in April and May.
7. Customer will resume paying his monthly EMI from 4^th June 2020. This will have respective break up of interest and principal. (Principal repayment will continue from June 2020)
8. Since we have not recovered any principal from the customer in April and May, this will result in pushing out the maturity of the loan by 2 months. Customer’s balance tenure of 200 months will now start from June 2020 and end in Jan 2037.
9. This still leaves us with the interest for Apr and May to be recovered. This amount (Rs 10,784 + Rs 10,770) is equal to Rs 21,554.
10. At Home First, we propose to give customers 2 options to pay this back.
11. Rs 21,554 to be paid back in 6 equal instalments along with interest on this amount at the same rate of interest as the parent loan (Additional amount of Rs 3,798 in addition to regular EMI of Rs 12,074 starting from June 2020). Repayment of additional amount will also start from 4^th June 2020
12. Rs 21,554 to be paid back in 12 equal instalments along with interest on this amount at the same rate of interest as the parent loan (Additional amount of Rs 1,963 in addition to regular EMI of Rs 12,074 starting from June 2020). Repayment of additional amount will also start from 4^th June 2020
13. In the above example, if the customer has not paid the EMI for 4th March, 2020 and wants to opt for postponement of all 3 EMIs (Mar, Apr and May), then the interest component of 4^th March EMI also will get added to the total interest recoverable in 6/12 months.