Worked examples and checklists
Lost your job or fell ill? How to ask your bank for an EMI moratorium or restructuring
How to request EMI relief or loan restructuring in India after job loss, illness, death in the family or business failure: what to write, documents to attach and how lenders decide.
If a job loss, illness, death in the family or business failure means you cannot pay your EMIs, write to the lender before the account falls overdue. Ask specifically for a short moratorium, a longer tenure, a reduced EMI, or a combination, and attach evidence. In India there is no general legal right to an EMI holiday for individual borrowers today; the 2020 Covid moratorium was a one-off. Lenders decide under their board-approved policies. A clear request with documents and a realistic plan, sent early, is far more likely to succeed than a phone call after three missed EMIs. Interest normally continues during any moratorium, so a pause makes the loan dearer even when it helps.
This guide is part of the debt repayment plan checklist. See also restructuring vs settlement.
What you can ask for
| Request | What it means | Cost to you |
|---|---|---|
| EMI date change | Move the debit to match a new salary date | Small broken-period interest |
| Short moratorium (for example 3 months) | No or reduced EMIs for a period | Interest accrues and is added; later EMIs rise or tenure extends |
| Tenure extension | Same balance, more months | Lower EMI, more total interest |
| Step-up EMIs | Low EMIs now, higher later | Useful if income will recover |
| Conversion of overdue into a term loan | Overdue amount repaid separately over time | Interest on the converted amount |
| Interest rate review | Lower rate in exceptional cases | Rarely granted |
Documents that make a request credible
| Situation | Documents to attach |
|---|---|
| Job loss | Termination or relieving letter, last salary slips, full-and-final settlement statement, proof of job search |
| Salary cut | Revised offer letter or salary slips before and after |
| Medical emergency | Hospital discharge summary, bills, insurance claim status, doctor's certificate on expected recovery |
| Death of a co-borrower or earning member | Death certificate, legal heir details, any insurance claim lodged |
| Business slowdown | GST returns, bank statements for 6 to 12 months, income tax returns, list of receivables |
| Natural disaster | Local authority certificates or reports on the damage |
Send copies, never originals. Black out details unrelated to the request.
A request letter structure
- Account details: name, loan account number, registered mobile.
- What happened and when, in two or three sentences.
- Your current position: income now, essential expenses, other EMIs.
- The specific request: for example, "a moratorium of three months followed by an extension of tenure by 24 months, so that the EMI falls from ₹14,200 to about ₹10,000".
- Why it will work: new job joining date, expected recovery date, family support.
- Request for a written reply and a revised repayment schedule.
Send it to the collections team and the grievance redressal officer named in your key fact statement or on the lender's website.
Worked example: what a moratorium really costs (illustrative)
A personal loan has ₹3,00,000 outstanding at 15% a year with 30 months left. The EMI is about ₹12,054.
Request: a three-month moratorium, then the remaining balance over 30 months.
- Interest during three months ≈ ₹3,00,000 × 15% × 3 ÷ 12 = ₹11,250. Monthly compounding makes it slightly more, about ₹11,391.
- New balance ≈ ₹3,11,391
- New EMI over 30 months at 15% ≈ ₹12,511, about ₹457 more than before
If instead the remaining term is stretched to 42 months after the pause, the EMI falls to about ₹9,575. Total paid rises from about ₹3,61,607 (30 × ₹12,054) to about ₹4,02,149 (42 × ₹9,575), roughly ₹40,500 more.
So the relief is real, but it has a price. Use the repayment plan calculator to compare options before you ask.
How lenders assess hardship requests
Lenders typically look at:
- whether the account is still current or only recently overdue;
- your repayment history before the problem;
- whether the hardship is temporary or permanent;
- your remaining income and other obligations;
- the security, if any;
- their policy for the product.
If your hardship is permanent and you cannot repay in full even over a longer time, the lender may suggest a settlement instead. See settlement examples and settle or keep paying.
Insurance you may already have
Before asking for relief, check:
- Loan protection or credit life insurance sold with the loan. It may pay off the loan on death, and some policies cover job loss or disability.
- Health insurance, which can reduce the medical bills that caused the problem.
- Employer group cover for death or disability.
Ask the lender for the policy details if it was bundled. Insurance complaints go to the insurer first, then to the Insurance Ombudsman under IRDAI's rules.
If the lender says no
- Ask for the reason in writing.
- Offer an alternative, such as a shorter moratorium or a smaller EMI reduction.
- Keep paying what you can, and tell the lender in writing.
- If the lender is unfair, for example ignoring your request, adding charges not in the key fact statement or harassing you, complain to the grievance officer, then the RBI Ombudsman after 30 days. See complaints.
A refusal to restructure is a commercial decision and generally not a ground for an Ombudsman complaint by itself. Unfair conduct is.
When to consult a professional
If the hardship involves a death in the family and questions about who is liable, or business debts with personal guarantees, take legal advice. Your District Legal Services Authority may help for free.
Frequently asked questions
Is there an RBI moratorium for individuals in 2026?
No general moratorium is in place. Relief depends on each lender's policy, and on any specific RBI measures announced for disasters or particular regions.
Will a moratorium appear on my credit report?
It depends on how the lender implements it. A formal restructuring may be reported as such. Ask the lender how it will report the change.
Do heirs have to repay a deceased person's loan?
Heirs are generally liable only to the extent of the estate they inherit, unless they are co-borrowers or guarantors. Check any loan insurance first, and take legal advice.
Can I ask for relief on a credit card?
Yes. Ask for a conversion of the outstanding into EMIs at a lower rate, or a repayment plan.
Sources
- Reserve Bank of India: fair practices code and stressed asset rules
- IRDAI Bima Bharosa: insurance complaints, including loan protection cover
- RBI Complaint Management System: complaints about unfair treatment
