Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Home > What is the Meaning of Moratorium Period in Home Loan?

Loan for Home

What is the Meaning of Moratorium Period in Home Loan?

What is the Meaning of Moratorium Period in Home Loan?

When you are taking out a home loan, a moratorium period is a facility that you can access. Here is everything you need to know about a moratorium period in home loans.

What is the meaning of moratorium period?

‘Moratorium’ means “a state of temporary inactivity”. A moratorium period is a duration usually at the beginning of your EMI repayment schedule where you don’t have to pay your monthly instalments. In essence, it is an EMI holiday period. Lending institutions usually offer this to customers availing student or home loans. For example, students are offered a one-year-long moratorium, at the beginning of their EMI repayment schedule as there may be a time gap between the completions of their course and finding employment.

Additional Read: Monetary Relief Measures in the Time of COVID-19

Moratorium period and home loans

Often, there are delays in the delivery of housing projects. In such a scenario, house buyers are forced to cope with the double burden of meeting the expenses of their present accommodation (rent) as well as with the responsibility of paying their EMIs. A moratorium is offered to home buyers to relieve them of this double burden. Additionally, they can use the home loan moratorium to plan their finances and prepare for the upcoming additional monthly expense (EMI).

Moratorium period vs grace period

It is easy to confuse this with a grace period. A grace period is usually an extended time given to the borrower to clear any dues. Moratorium, unlike a grace period, will accrue interest to your account and is usually offered to prevent any defaults and the possibility of the accumulation of dues.

How does a moratorium period affect your EMI?

You can opt to pay the moratoriuminterest as it is charged, that is, during the period itself. In such a scenario, your EMI won’t be affected as you have already paid the interest. Another payment method which won’t have any impact on your EMI is by opting to pay the moratorium period- interest after the original EMI schedule. This way, your EMI would remain the same and only your tenure would increase.

Your EMI will be impacted if you don’t opt for the above-mentioned methods. The interest accrued, then, would be adjusted by increasing your EMI. In this case, you won’t have to pay anything during the holiday period.

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.

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 sanctioned on floating interest rates.

Additional Read: Loan moratorium period extended by 2 years: Govt

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!

Apply For House Loan

Say Hello to Your New Home with Our Easy Home Loans!

Apply now
Popular Searches
anyror modt charges 712 utara online gujarat pre emi calculator earnest money deposit Goa Land Record earnest money khasra number meebhoomi Assam Land Record
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.