Blox Logo
You haven’t selected any properties.
Please select minimum 2 properties to compare
Discover. Experience. Buy.
Get Personalized experience
by logging in
Sign Up
  • building-primaryProperty Listings
  • developer-primaryDevelopers
  • users-primaryAbout us
  • blogs-primaryBlogs
  • pressmentions-primaryPress Mentions
  • phone-primaryContact Us

The Impact of Home Loan Moratorium on Your EMI and Repayment Schedule

Blox Social
Posted on
May 21, 2023

A home loan is a long-term financial commitment that allows individuals to fulfill their dream of owning a house. However, unforeseen circumstances such as a global pandemic or a personal financial crisis can create difficulties in meeting loan repayment obligations. In such situations, a home loan moratorium can come to the rescue.

Let's delve into the impact of a home loan moratorium on your Equated Monthly Installments (EMIs) and repayment schedule.

A home loan moratorium, also known as a repayment holiday, is a temporary suspension of loan repayments offered by financial institutions to borrowers facing financial hardships. This relief measure provides individuals with the option to defer their EMIs for a specific period without adversely affecting their credit score or loan terms. During the moratorium period, borrowers are not required to make any principal or interest payments.

One of the significant impacts of a home loan moratorium is the temporary relief it offers to borrowers experiencing financial stress. It allows individuals to redirect their funds towards essential expenses, such as healthcare, education, or managing other debts. By temporarily suspending loan repayments, the burden on borrowers' monthly budgets is alleviated, providing much-needed financial breathing space.

However, it is crucial to understand that a home loan moratorium is not a waiver of payments. It is merely a deferment of EMIs. The interest on the loan continues to accrue during the moratorium period, leading to an extended repayment tenure. This means that the total interest payable on the loan increases, and borrowers end up paying more in the long run.

When the moratorium period ends, borrowers have several options to resume their loan repayments. They can either choose to extend the loan tenure by the duration of the moratorium, thereby maintaining the original EMI amount, or they can increase their EMI amount to compensate for the deferred payments. The latter option allows borrowers to complete the loan repayment within the original tenure.

It is essential to note that the impact of a home loan moratorium on the EMI and repayment schedule depends on various factors, such as the loan amount, interest rate, and remaining tenure. Borrowers should carefully evaluate their financial situation and consult with their lenders before opting for a moratorium. It is also advisable to consider the overall cost of the loan, including the additional interest accrued during the moratorium period.

Furthermore, borrowers must be aware of the potential impact on their credit score. While the moratorium itself does not impact the credit score negatively, any delays or defaults in loan repayments beyond the moratorium period can have adverse consequences. Lenders may view such instances as a sign of financial distress, making it difficult for borrowers to secure future loans or credit facilities.

In conclusion, a home loan moratorium provides temporary relief to borrowers facing financial hardships by allowing them to defer their EMIs. It offers flexibility in managing immediate financial obligations but results in an extended repayment tenure and increased interest payments. Borrowers must carefully evaluate their financial situation and consider the long-term implications before opting for a moratorium. Open communication with the lender is crucial to understand the available options for resuming loan repayments after the moratorium period. By making informed decisions, borrowers can navigate through challenging times while minimizing the impact on their EMI and repayment schedule.


Finance & Legal
Recent Blogs
Real Estate
Crucial Components of a Sales Agreement: What Every Homebuyer Should Know

So, you’ve found your dream home, arranged for the finances to purchase it, and are now ready to live your desired life carefree. But amidst all that, as a new or prospective home buyer, you must not let one critical part of the property purchase process go unnoticed: the sales agreement

Blox Social
Sep 22, 2023
Real Estate
Sanpada Real Estate: Exploring the Vibrant and Thriving Neighbourhood of Navi Mumbai

Picture yourself in the vibrant heart of Navi Mumbrai, where luxury meets opportunity and a sense of community thrives. Welcome to Sanpada, a locality that has swiftly risen to prominence in the world of real estate. With a coveted pin code of 400705, Sanpada offers a dynamic landscape of living options. Boasting over 350 properties for purchase and more than 100 for rent, it's no wonder residents rate this neighbourhood an impressive 4.5/5 for connectivity and a solid 4.3/5 for safety.

Blox Social
Sep 22, 2023
Real Estate
Know the Difference: Lockable vs. Virtual Office Space

In today's rapidly changing world of commerce, where the ability to adjust and be versatile is pivotal for prosperity, the selection of suitable office premises can wield considerable influence. Amongst the numerous alternatives at hand, two particular terms frequently gain prominence: secured office areas and virtual office settings. Although each possesses its own strengths, they are distinctly purposed. To effectively comprehend the distinctions and arrive at a well-informed choice, it becomes imperative to delve into the dissimilarities between these two alternatives.

Blox Social
Sep 22, 2023