What is Moratorium Period when Looking for Home Loan

Posted by Sarita Yadav on August 23rd, 2022

The term "moratorium period" refers to the period during which you can take a break from paying the EMI of your home loan. This practically means you don't have to start paying off your home loan immediately after paying off the loan. You can take a vacation from paying your home loan EMI and then start paying your home loan EMI after a certain break.

Home loan lenders are extending this special opportunity to help you better plan all of your finances as you better prepare and be more organized for your long-term commitment to paying off your home loan.

Who is Eligible for the Credit Moratorium?

While a loan moratorium is available for all types of loans, including home loans, personal loans, education loans, loans against property, and credit card fees, students are the most likely to take advantage of the moratorium. Because months or years can pass between graduation and finding a job, most student loans have a repayment term or a moratorium.

Apart from student loans, home loans are most likely a moratorium as the amounts involved are large and borrowers may need time to get their finances in order before starting the repayment process.

Is Interest in Building Savings Waived During the Suspension Period for Building Savings?

All home loan institutions (banks and NBFC) have reiterated that the moratorium is simply a suspension of EMI payments and not a waiver. This obviously means you can extend your EMI payments for housing loans by a few weeks or months without being penalized for doing so. The moratorium does not include any concessions. This means that interest will continue to accrue on the principal amount currently owed.

Financial management is a difficult path that requires patience. So, you have to be very careful with your financial management, especially if you have decided to take out a home loan, which is definitely a long-term financial commitment. You can take advantage of the home loan moratorium at the beginning of your home loan to reorganize and organize your finances so that you are ready to pay the EMI of your home improvement loan regularly every month.

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Sarita Yadav

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Sarita Yadav
Joined: August 25th, 2020
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