HSBC Moratorium for Loans & Credit Card till August ’20
HSBC has announced the continuation of RBI’s Moratorium package for retail loans and Credit Cards’ customers up till August 31, 2020. On the backdrop Covid-19 pandemic and subsequent lockdowns, the monthly income of households is severely hit across the country. The RBI has allowed all banks and NBFCs to allow customers to defer their repayments falling due between March 1, 2020, to August 31, 2020. The HSBC has shared detailed guidelines and FAQs for customers on its website.
The purpose of the regulatory package is to ease the burden of paying out EMIs amid the ongoing financial disruptions.
The Moratorium is offered on the following:
- Home Loans
- Personal Loans
- Business loans
- Credit Card outstanding
- Interest on Cash Credit/ Overdraft facilities
- Interest on Working Capital facilities
- Working capital financing
Also Read: COVID 19 Personal Loan in India
Business Loan Customers
On account of the Covid-19 pandemic, all eligible business credit account customers are offered the option to avail of Moratorium on payment of instalments or interest due for some loans and credit facilities falling due between March 1, 2020 and August 31, 2020, said the bank’s public note shared on its website.
The customers are allowed to delay the principal and /or interest component, bullet repayments, EMIs, and credit card outstanding falling due between March 1, 2020, to August 31, 2020. The repayment schedule will be extended accordingly and communicated to customers after the moratorium period. The interest will continue to accrue on the outstanding principal during the moratorium period.
As per the agreement between the customer and the bank, the outstanding interest up to 31 August 2020 for Working Capital facilities will be converted into a Funded Interest Term Loan. The customer can repay the same up till 31 March 2021.
The banks are also permitted to reassess the working capital cycle of a borrowing entity and reduce the ‘drawing power’ by the moratorium period. They can later restore the margins to the original levels by March 31, 2021.
For any query regarding Moratorium the customers are advised to contact their Business Relationship Manager. The final decision to provide repayment relief rests with the bank. Opting for Moratorium will not result in a downgrade of asset classification or credit rating. However, non-payment of dues prior to 29 February 2020 will impact asset classification as per loan terms.
Wealth and Personal Banking Customers
Frequently Asked Questions (FAQs)
✅ What is HSBC’s moratorium relief package for COVID19?
Complying by RBI’s guidelines, HSBC has granted another moratorium (provision to defer EMIs & interest payments) to its customers. The total tenor of Moratorium is now six months, March 1, 2020, to August 31, 2020. The bank is offering Moratorium on the principal and/or interest payments, bullet repayments, Equated Monthly instalments (EMIs), and credit card dues during this period. The relief is offered to all customers of Wealth and Personal Banking on their term retail loans such as Home Loans, Loans against property, Personal Loans, and Credit Cards.
✅ What is the tenor of COVID moratorium?
The Moratorium is valid from 1 March 2020 to 31 August 2020.
✅ I obtained moratorium-1, what should I do to extend till August 2020?
All Moratorium 1 customers are automatically registered for moratorium 2. So no steps are required further for extending Moratorium. Your next EMI will be due in September 2020.
✅ I did not use a moratorium scheme before. How do I get EMI relief now?
You do not need to apply. If you do not pay one or more EMI due between 1 March to 31 August 2020, and meet the below-mentioned eligibility criteria, then Moratorium will apply automatically for your loan within 10 working days from EMI date.
✅ What are the eligibility criteria for HSBC COVID EMI relief?
- The loan must be disbursed before March 1, 2020
- There should not be any pending instalments or payments as of February 29, 2020.
- Obtaining Moratorium entails agreeing to repay the next EMI in September 2020.
- The moratorium can only be applied for future EMIs. There will be no refund for previous EMIs.
✅ How do I opt-out or cancel my Moratorium request?
You can send SMS from your registered mobile number in the following format.
For Personal Loans: SMS OPTOUTPL LAN to 575750
For Mortgages (Home Loan, Loan Against Property, Smart Home Loan, Smart Loan Against Property): SMS OPTOUTHL LAN to 575750
LAN is Loan account number.
The request should be made at least 5 working days prior to the next EMI date. Contact your Relationship Manager or HSBC PhoneBanking for any issues in making the requests.
✅ Do I need to pay at once after the moratorium period?
No. For Home Loans, Loans Against Property, and Personal Loans, the next EMI will be due in September 2020. The residual loan tenure will be extended as per the accumulated interest, and the burden of repayment will be spread across the tenure. In case of smart home loans or partly disbursed loans, the accumulated interest will be due in September 20. But if the customer finds it challenging to repay interest after the Moratorium, the bank may allow converting it into a funded interest term loan (FITL).
✅ What happens if I am not eligible for Moratorium, and I am unable to make payment?
If your account is not deemed fit for Moratorium by the bank, you must pay out due instalments and interest amount as per the existing schedule, or it will hit your credit rating.
✅ What happens if I miss the payment during Moratorium?
If your account is eligible for Moratorium, non-payment will be registered for COVID EMI relief.
✅ Can I get a refund for EMIs paid during permissible Moratorium duration?
No, payments already made will not be reversed back.
✅ What happens to an auto payment option during the Moratorium?
For those who have applied for Moratorium, automated instructions (ACH/SI/ECS/PDC) will be stopped during the not the moratorium period. However, it will continue for those who have not sought moratorium benefit.
✅ What will be the rate of interest for the moratorium period?
The prevailing rate of interest will continue as before. However, the change will only occur if the benchmark lending rates will change.
✅ How will the bank communicate acceptance of Moratorium request?
The bank will send an SMS or email on your registered mobile number or email ID to inform you about your moratorium request. Later on, an email with a revised repayment schedule will also be sent.
✅ Can I make repayment during Moratorium, how is it adjusted?
Any payment made during the moratorium period will be apportioned towards the first EMI payable after August 31.
Retail Credit Card Customers
Frequently Asked Questions (FAQs)
✅ How the interest be charged during the Moratorium period?
The interest will be accrued and become payable after the moratorium duration. The applicable rate of interest will be as per Terms &Conditions of the card. In the case of Credit Cards, the interest could be as high as 42% right from the date of each transaction. Thus it is recommended to opt for Card Moratorium after due consideration. Besides, the entire outstanding involving the balance and accrued interest will be payable on the next Credit Card statement post the moratorium expiry.
✅ On non-payment, will Moratorium be automatically applied on my HSBC Credit Card?
Yes, Moratorium will be applied automatically if you meet the following eligibility criteria on your HSBC Credit Card.
- If the payment due is March 2020 to August 2020. Customers whose payments are outstanding before February 29, 2020, are not eligible.
- Blocked or closed accounts are not eligible. Likewise, all accounts that do not fulfil bank’s risk policy will not be considered for Moratorium.
- Accounts booked after March 1, 2020, are also not eligible for COVID moratorium relief.
Basis these factors, if your account is eligible and you fail to make payment during the granted moratorium duration, the account will automatically will be eligible for EMI relief under RBI’s Covid19 package. The next statement due will be presented in September 2020.
✅ Can I opt-out of Moratorium by making complete payments?
Yes, you can make full or part-payments despite opting for Moratorium. However, in case you wish to opt-out, send SMS, OPTOUT XXXX to 575750 from your registered mobile number by 02 August 2020. Here XXXX is the last 4-digits of your primary Credit Card.
✅ How to deal if I have Cash on EMI, Balance Transfer, Loan on Phone, Merchant EMI, or Balance conversion plans?
Your EMIs will continue to show in Card statement, but you may choose to pay or not pay. All unpaid dues linked to a credit card will be payable September 2020 onwards. However, HSBC has extended further relief to customers by offering them to consolidate all such loans into an up to 6 EMIs (as per Moratorium availed). The longest moratorium tenor will be offered to repay the outstanding on these loans. Plus, this deferment of payment will be at no additional interest charge. Prepayment can be made without any charge at your flexibility. However, the previous accounts’ terms will not change.
✅ Will I be charged late payment fees during the moratorium period?
✅ What is the repayment schedule after Moratorium?
After the Moratorium entire amount of deferred balance + EMIs + applicable interest + Fresh balances generated + Tax will constitute your September 2020 Card statement.
✅ Can I opt Balance Transfer, Cash on EMI, Balance conversion, or Loan on Phone during Moratorium?
No, customers opting for Moratorium are not eligible for any new credit products for the EMI Holiday period.
✅ Can I request a change in the statement cycle during Moratorium?
✅ Will the Credit Card statement be sent during the moratorium period?
Yes. However, you are not expected to pay. You can pay according to your cash flows.
✅ Will Moratorium affect my credit limit?
No, it will not affect your limit.
✅ Will Moratorium affect my credit report?
✅ Will non-payment in a month, hold my Standing Instruction (SI)?
Yes. If your account has insufficient balance during this period, you get moratorium relief automatically from the bank. Standing instructions will be held back for other months till August 2020.