When you are taking out a home loan, a moratorium period is a\nfacility that you can access. Here is everything you need to know about a\nmoratorium period in home loans.<\/p>\n\n\n\n
‘Moratorium’ means “a state of temporary inactivity”. A\nmoratorium period is a duration usually at the beginning of your EMI repayment\nschedule where you don’t have to pay your monthly instalments. In essence, it\nis an EMI holiday period. Lending institutions usually offer this to customers\navailing student or home loans. For example, students are offered a\none-year-long moratorium, at the beginning of their EMI repayment schedule as\nthere may be a time gap between the completions of their course and finding\nemployment. <\/p>\n\n\n\n
Additional\nRead<\/strong>: Monetary\nRelief Measures in the Time of COVID-19<\/a><\/p>\n\n\n\n Often, there are delays in the delivery of housing projects. In such\na scenario, house buyers are forced to cope with the double burden of meeting\nthe expenses of their present accommodation (rent) as well as with the\nresponsibility of paying their EMIs. A moratorium is offered to home buyers to\nrelieve them of this double burden. Additionally, they can use the home loan\nmoratorium to plan their finances and prepare for the upcoming additional\nmonthly expense (EMI). <\/p>\n\n\n\n It is easy to confuse this with a grace period. A grace period is\nusually an extended time given to the borrower to clear any dues. Moratorium,\nunlike a grace period, will accrue interest to your account and is usually\noffered to prevent any defaults and the possibility of the accumulation of\ndues.<\/p>\n\n\n\n You can opt to pay the moratoriuminterest as it is charged, that is, during the period itself. In\nsuch a scenario, your EMI won\u2019t be affected as you have already paid the interest.\nAnother payment method which won’t have any impact on your EMI is by opting to\npay the moratorium period- interest\nafter the original EMI schedule. This way, your EMI would remain the same and\nonly your tenure would increase.<\/p>\n\n\n\n Your EMI will be impacted if you don’t opt for the above-mentioned\nmethods. The interest accrued, then, would be adjusted by increasing your EMI.\nIn this case, you won’t have to pay anything during the holiday period.<\/p>\n\n\n\n It is recommended that you use the EMI moratorium calculator available on our website to assess the impact of the moratorium period on the EMI or the tenure.<\/p>\n\n\n\n You must, however, check with your lending institution and be thorough with the terms and conditions because some institutions might increase the interest rate after the holiday period to compensate for it. This usually happens with home loan<\/a> sanctioned on floating interest rates.<\/p>\n\n\n\n Additional Read:<\/strong> Loan moratorium period extended by 2 years: Govt<\/a><\/p>\n\n\n\n Tata Capital has flexible terms and conditions when it comes to home loan moratorium period, so if you think you would plan your finances better then Tata Capital loans are the way to go! Want to learn more about the moratorium period in home loans? Download Tata Capital’s Home Loan app<\/a> today!<\/p>\n\n\n\nMoratorium period and home loans<\/strong><\/h2>\n\n\n\n
Moratorium period vs grace period<\/strong><\/h2>\n\n\n\n
How does a moratorium period affect your EMI?<\/strong><\/h2>\n\n\n\n