A Moratorium Period is a time period during the loan span when the borrower is not compelled to make any repayment. However, it is a waiting period before which repayment via EMIs comes into effect. Normally, the repayment commences after the loan is distributed and the repayment of the loan has to be made each month.

In simple words, Moratorium means a law or an agreement that gives people more time to pay their debts.

A moratorium often comes into effect in response to a crisis that disrupts the normal routine. For instance, in the aftermath of an earthquake, flood, drought or disease outbreaks, an emergency moratorium on some financial activities may be conferred by a government or the central bank. It is lifted when things are back to where they used to be initially and the financial crisis is over.

What are the benefits of paying loan within the Moratorium Period?

It is advisable, if an individual has the liquidity, they should not opt for a moratorium. Repaying the loan amount is advised as interest continues to accrue on the loan amount even during the moratorium period. Repaying helps in reducing the interest cost.

Having an EMI holiday or a moratorium period at the start of your home loan gives you ample time to plan your finances.

What is the benefit of Moratorium Period in Education Loan?

In Education loans it is suspected that the student would be eligible for generating income after completion of the course. And some time is also provided along with course term since the borrower might not secure a job or make income shortly after the completion of the course.

Categories: Reviews

Praachie

Content writer and Digital Marketer.

0 Comments

Leave a Reply

Avatar placeholder
×