Full formBanking & Finance
ERHstands forEquated Repayment Holiday
Full Form of ERH
What is ERH?
Equated Repayment Holiday (ERH) is a banking facility that allows borrowers to temporarily suspend or reduce their equated monthly instalments (EMIs) for a predetermined period, typically ranging from three to twelve months. During this holiday, the borrower is not required to make principal repayments, but interest continues to accrue and may be added to the outstanding loan amount. In India, ERH is commonly offered by banks and non-banking financial companies (NBFCs) on home loans, vehicle loans, and personal loans, especially during economic downturns or personal financial hardships. The Reserve Bank of India (RBI) has periodically introduced regulatory frameworks for ERH, such as during the COVID-19 pandemic, to provide relief to borrowers facing cash flow issues. This tool is used across the country by both public and private sector lenders, and it is governed by specific terms and conditions, including eligibility criteria and processing fees. For students preparing for banking exams like IBPS PO or RBI Grade B, understanding ERH is crucial as it appears in questions related to loan restructuring, asset classification, and borrower relief measures. The facility helps borrowers avoid default, but it also leads to higher overall interest costs because the loan tenure may extend or the EMI amount may increase post-holiday. Thus, ERH serves as a strategic option for temporary liquidity management, balancing lender risk and borrower convenience.
ERH का फुल फॉर्म
समान पुनर्भुगतान अवकाश
Example
Due to the sudden job loss, I applied for a six-month ERH on my home loan to avoid missing any EMI payments.
ERH — frequently asked questions
What is the full form of ERH?
The full form of ERH is Equated Repayment Holiday, a temporary suspension of EMI payments offered by banks and NBFCs in India.
Is ERH the same as a loan moratorium?
Yes, ERH is often used interchangeably with a loan moratorium, though a moratorium can also refer to a complete halt of both principal and interest payments, whereas ERH specifically refers to the postponement of principal repayment.
Does ERH affect my credit score?
ERH itself does not directly harm your credit score if you comply with the terms, but the loan restructuring or extended tenure may be reported to credit bureaus, potentially impacting future borrowing capacity.