EMI Moratorium Extension: Rules, Benefits, and Risks

An EMI moratorium is a pause on your loan instalments that your lender agrees to, in writing, for a set period. It is also called an EMI holiday, and some people call it a payment extension.

Interest may continue to accrue on the outstanding balance during the moratorium. The amount depends on the loan agreement, applicable relief scheme and the lender’s method of calculating interest.

When the pause ends, the bank recovers the extra interest in one of two ways: a higher EMI, or a longer loan.

Here is the line that matters most. Stopping your EMIs without written approval is not a moratorium. It is a missed payment, and it shows on your credit report as days past due (DPD). Read how to clear DPD in your CIBIL report.

No rule gives a moratorium as a right on every kind of loan. Any pause is the lender's decision, and card issuers do not usually offer one.

For the plain meaning of the term, see our page on the moratorium period. This page deals with how to get one, and what it costs.

RBI relief measures have varied by period and borrower category. The COVID-19 moratorium in 2020, the exporter-focused relief announced in 2025 and any later calamity-related measures had specific eligibility conditions and deadlines. These historical schemes should not be treated as a general moratorium available to all borrowers in 2026.

2020. RBI's COVID-19 Regulatory Package (27 March 2020) permitted lenders to grant a 3-month moratorium on instalments due from 1 March to 31 May 2020. It was later extended to 31 August 2020. Interest continued to accrue. Read about the 2020 and 2021 moratoriums.

2025, eligible exporters. The RBI's Trade Relief Measures Directions, 2025, dated 14 November 2025, allowed regulated lenders to offer qualifying exporters a moratorium on eligible term-loan instalments falling due between 1 September and 31 December 2025. Interest continued to accrue on a simple-interest basis, and accumulated interest could be converted into a funded interest term loan repayable no later than 30 September 2026. Eligibility depended on the specified export-sector, credit-facility and account-status conditions; this was not a general moratorium for all borrowers.

From 1 July 2026, calamity areas only. When the Central or State Government declares a calamity, lenders can extend relief, including a moratorium, to eligible borrowers without waiting for a request. Accounts must be standard and not more than 30 days overdue on the date of the event. The borrower can opt out until 135 days after the declaration. See the 2026 calamity relief rules.

Everyone else. Any moratorium is the lender's decision, under its own Board-approved policy.

When RBI allowed the 2020 moratorium, it said "interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period", and that rescheduling under it would not count as a default for reporting to credit bureaus.

An EMI moratorium extension suits a short, temporary gap in income. Four common situations:

• Your income has stopped, for example after a job loss.

• A medical emergency has hit your savings.

• Your income is irregular for the next three to six months.

• You have already missed one EMI and want to stop it snowballing.

If you only face a one- or two-month squeeze, cutting spending or making a partial payment is usually better. If you can still pay, pay.

Apply before the EMI bounces, not after. A request made in advance reads as planning. One made after a default reads as trouble.

A pause will not fix everything. If your problem is many EMIs rather than a short income gap, a moratorium only moves the problem a few months forward. For that, see the options further down.

If most of your take-home pay already goes to EMIs, a 3-month pause only moves the problem 3 months later. Check your EMI-to-income ratio first.

Take a Rs. 5 lakh personal loan at 14% a year over 36 months. The normal EMI is about Rs. 17,089. These figures use monthly compounding during the pause.

The earlier in the loan the pause comes, the more it costs, because more principal is still outstanding.

Ask your lender whether the interest during the pause is simple or compounded. Under the 2025 exporter relief, it was simple. If you choose to extend your EMI tenure instead of raising the EMI, check the total you will pay, not just the monthly figure.

These steps work for most banks and NBFCs.

1. Write in. Send a written request to your bank or NBFC explaining that you want to pause your EMIs.

2. Attach hardship documents. Salary slips, a termination letter, hospital bills, or whatever shows the problem.

3. Submit a formal application. Use the lender's own form or portal and keep a receipt.

4. Wait for written approval. Keep paying your EMIs until you have it. Do not cancel the NACH mandate.

5. Confirm the plan after the pause in writing. Get the revised EMI or tenure on paper. Apply early, before you miss a payment.

If your bank says no, ask it to say so in writing, and ask what it can offer instead, such as a longer tenure.

If recovery calls start while you wait, you have rights on call hours and conduct. Read our guide to the loan recovery agent harassment complaint process.

Lender-specific steps are on our pages for HDFC and SBI.

Getting abusive calls or surprise visits from agents? FREED Shield helps with abusive recovery calls or unannounced agent visits. It's open to everyone.

A pause is one tool among several. In order, consider:

1. Asking for a lower EMI or a longer tenure.

2. Consolidating several loans into one.

3. A balance transfer to a cheaper lender.

4. A moratorium.

5. Settlement, as a last resort.

Lenders set their own cut-off score for a balance transfer, so no single number applies. Read about loan restructuring under RBI rules, and use the balance transfer calculator to test a move.

FREED does not grant or apply for moratoriums. That is between you and your lender.

If you are still paying and your credit score is 700 or above, the Loan Consolidation Plan combines eligible unsecured loans into one EMI. FREED charges the customer nothing for it.

If you truly cannot pay, settlement is the other route. Settlement is not something a borrower chooses out of preference. For borrowers who cannot afford their unsecured debt repayments, negotiated settlement may be an option to consider after reviewing alternatives. Any reduction depends on the lender's decision and the agreed terms; no specific reduction is guaranteed. Settlement can affect your credit profile and future borrowing options. Review the programme's fees and terms carefully, and confirm the applicable credit-reporting treatment before proceeding.

See the debt resolution programme. FREED does not handle secured loans such as home, car or gold loans.

Whatever route you take, these four habits help:

• Make partial payments during the pause, if the bank allows them.

• Get the revised schedule in writing before the pause ends.

• Set a reminder for the restart date, and check your NACH mandate.

• Prepay when your income returns.

*Terms apply. Outcomes vary by lender and case.