Loan Moratorium Calculator
Enter your loan details and moratorium length to see exactly how deferring your EMIs changes your total interest cost, your new monthly payment, and how long your loan will last. Choose whether interest compounds into the principal (as most Indian banks applied during the COVID-19 moratorium) or is paid separately, then compare the new numbers against your original schedule side by side.
What is a loan moratorium?
A loan moratorium is a temporary pause granted by a lender during which the borrower does not need to make their regular EMI (Equated Monthly Installment) payments. The moratorium does not write off the debt - interest continues to accrue on the outstanding balance throughout the pause. When the moratorium ends, the borrower resumes payments, but they now owe more because of the interest that accumulated while payments were suspended. In India, the Reserve Bank of India granted a widely used six-month moratorium on all term loan EMIs between March and August 2020 in response to the COVID-19 pandemic, bringing the concept to national attention.
How does interest accrue during a moratorium?
The way interest is handled during a moratorium depends on the agreement with the lender. The most common method, used by most Indian banks during the 2020 moratorium, is to compound the interest monthly and add it to the outstanding principal. Each month the unpaid interest is folded back into the balance, so the next month's interest is calculated on a larger base. A less common arrangement lets the borrower pay just the interest each month during the moratorium (as a simple monthly charge) while the principal stays frozen. The calculator supports both options. Compounding always costs more overall, because interest accrues on interest.
Higher EMI vs. extended tenure: which should you choose?
After a moratorium ends you usually face two options. The first is to keep the original end date and absorb the higher balance through a larger EMI. The second is to keep the same EMI and accept that the loan runs for additional months. Mathematically, the higher-EMI route saves money in total because the loan closes on schedule and no extra interest-on-interest builds up over those extra months. However, if cash flow is tight, a modest tenure extension can make the payments manageable without a sudden jump in the monthly outgo. Use the repayment mode selector to compare both options side by side for your specific numbers.
How this calculator works
Enter your loan amount, annual interest rate, and total tenure in months. If you had already paid some EMIs before the moratorium began, enter that count too so the calculator knows your outstanding balance at the moratorium start date. Then choose the moratorium length and how interest is treated. The calculator computes the accrued interest, the revised balance, and your new EMI or extended tenure. The schedule table shows the month-by-month balance during the moratorium and for the first year of normal repayments. The chart overlays the original payoff curve against the revised one so you can see exactly where the curves diverge and when each scenario closes to zero.
Impact of moratorium length on extra interest (example: 10 lakh, 8.5%, 20 years)
| Moratorium length | Accrued interest | EMI increase | Extra total interest |
|---|---|---|---|
| 1 month | 7,083 | 66 | 7,962 |
| 2 months | 14,217 | 133 | 16,012 |
| 3 months | 21,401 | 200 | 24,148 |
| 6 months | 43,417 | 406 | 48,938 |
| 12 months | 88,888 | 838 | 101,388 |
Illustrative figures for a capitalize-interest moratorium at the start of a loan, higher-EMI repayment mode.
Frequently asked questions
Does a moratorium affect my credit score?
In India, the RBI directed banks not to classify accounts as non-performing assets (NPAs) if borrowers opted for the approved 2020 moratorium, and the moratorium itself was not to be reported as a default. However, specific lender policies and future moratoriums may differ. Always confirm with your lender before opting in, and check whether the deferred interest capitalisation will be reflected on your credit report.
Is the moratorium interest waived?
In most cases, no. The moratorium pauses payments but does not waive the interest that accrues during the pause. The Supreme Court of India did order banks to waive compound interest (interest on interest) for the six-month COVID-19 moratorium up to loans of 2 crore rupees, which is a specific exception. For all other moratoriums, you should assume the accrued interest will either be capitalised into the principal or charged separately.
What happens if I do not opt for the moratorium?
If you continue paying your regular EMIs throughout the moratorium window, your loan schedule is unaffected and you save the entire extra interest cost the moratorium would have caused. The moratorium is an option, not a mandate. Borrowers who can afford to keep paying benefit from skipping it entirely.
Can I opt for a moratorium on a home loan, personal loan, and education loan?
Yes, moratoriums can apply to any term loan - home loans, personal loans, car loans, and education loans - provided your lender grants one. The calculation method is identical regardless of loan type. Education loans sometimes have a built-in moratorium (called a repayment holiday) covering the course duration plus six months, during which only simple interest or no interest is charged, depending on the lender.
How do I calculate the outstanding balance at the moratorium start?
If you have paid k EMIs on an original loan of P at monthly rate r over N months, the outstanding balance is: P x (1 + r)^k minus (EMI x ((1 + r)^k - 1) / r). This is the standard amortization formula. This calculator computes it automatically from the number of EMIs already paid, so you do not need to work it out manually.
Why does compounding interest cost more than simple interest during the moratorium?
With compounding, the interest that accrues in month 1 is added to the balance, so month 2 interest is calculated on a larger base. Each month the base grows, so you pay interest on interest. With simple interest you pay the same monthly charge every month because the principal stays unchanged. Over three to six months the difference is modest, but over twelve months or more the compounding effect becomes significant.