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Moratorium EMI Calculator

Calculate the impact of a loan moratorium on your monthly EMI, total interest, and loan tenure with capitalized or deferred interest options.

Loan details

$
%
years
months

New monthly EMI

$1,948.68

Original EMI: $1,863.93

Accrued interest

$8,125.00

New principal

$258,125.00

Extra interest cost

$8,646.47

Total tenure

240 months

Adjusted loan cost breakdown

  • Principal$250,000.0054.8%
  • Total interest$205,990.3545.2%

Calculation breakdown

How moratorium interest changes your EMI or loan tenure.

  1. Calculate original EMI

    EMI=P×r(1+r)n(1+r)n−1\mathrm{EMI} = P \times \frac{r(1+r)^n}{(1+r)^n - 1}

    Principal $250,000.00 at 6.5% over 240 months gives $1,863.93 per month.

  2. Accrued interest during moratorium

    Imoratorium=P×r×mI_{\text{moratorium}} = P \times r \times m

    Simple interest on $250,000.00 for 6 paused months equals $8,125.00.

  3. New principal after capitalization

    Pnew=P+ImoratoriumP_{\text{new}} = P + I_{\text{moratorium}}

    $250,000.00 + $8,125.00 = $258,125.00.

  4. Recalculate EMI for remaining tenure

    EMInew=Pnew×r(1+r)n−m(1+r)n−m−1\mathrm{EMI}_{\text{new}} = P_{\text{new}} \times \frac{r(1+r)^{n-m}}{(1+r)^{n-m} - 1}

    $258,125.00 over 234 remaining months gives $1,948.68 per month.

Report tool

How the Moratorium EMI Calculator works

A loan moratorium lets you pause monthly payments for a set period. Interest still accrues on the outstanding balance during the pause. This calculator shows how that accrued interest changes your EMI, total interest, and loan tenure under two common lender options: capitalizing interest into the principal or keeping the same EMI and extending the loan.

Enter your loan amount, annual rate, original tenure, and moratorium length. Compare the original EMI from our EMI calculator with the adjusted payment after the pause. If your lender offers a broader grace period with multiple deferral types, the deferred payment loan calculator models capitalized, simple, interest-only, and subsidized deferrals. To see how extra principal payments offset moratorium costs later, try the EMI prepayment calculator.

What happens during a moratorium

During a moratorium, you do not make regular EMI payments, but the lender continues to charge interest on the outstanding principal. Regulators such as the Reserve Bank of India have clarified that moratoriums defer payment obligations; they do not waive interest. The accrued interest must be repaid through one of the adjustment methods below.

  • Capitalize interest: Add accrued interest to the principal and recalculate EMI over the remaining original tenure. Your monthly payment rises, but the loan end date stays the same.
  • Extend tenure: Keep the original EMI and extend the loan until the higher balance (principal plus accrued interest) is fully repaid. Your monthly payment stays the same, but you pay for more months.

Moratorium EMI formulas

First, calculate the standard EMI before any moratorium using the reducing-balance formula:

EMI=P×r(1+r)n(1+r)n−1\mathrm{EMI} = P \times \frac{r(1+r)^n}{(1+r)^n - 1}

During a moratorium of m months, simple interest accrues on the original principal P at the monthly rate r:

Imoratorium=P×r×mI_{\text{moratorium}} = P \times r \times m

The new principal after capitalization is:

Pnew=P+ImoratoriumP_{\text{new}} = P + I_{\text{moratorium}}

If you capitalize interest, recalculate EMI over the remaining n minus m months:

EMInew=Pnew×r(1+r)n−m(1+r)n−m−1\mathrm{EMI}_{\text{new}} = P_{\text{new}} \times \frac{r(1+r)^{n-m}}{(1+r)^{n-m} - 1}

If you extend tenure instead, keep the original EMI and solve for the additional months needed to repay P_new:

next=ln⁡(EMIEMI−Pnewr)ln⁡(1+r)n_{\text{ext}} = \frac{\ln\left(\frac{\mathrm{EMI}}{\mathrm{EMI} - P_{\text{new}} r}\right)}{\ln(1+r)}

Worked example

Suppose you borrow $250,000 at 6.5% annual interest for 20 years (240 months) and receive a 6-month moratorium. The original EMI is about $1,864 per month. During the pause, accrued interest is roughly $8,125 ($250,000 times 0.5417% times 6 months), bringing the new principal to about $258,125.

If you capitalize interest, the recalculated EMI over the remaining 234 months rises to about $1,936, adding roughly $16,800 in total interest compared with no moratorium. If you extend tenure instead, the EMI stays at $1,864 but the loan runs about 6 extra months, adding a similar interest cost spread over a longer schedule.

When to use each option

Capitalizing interest makes sense when you can afford a higher monthly payment and want to keep your original payoff date. Extending tenure preserves cash flow during recovery but increases lifetime interest. Some lenders also let you pay accrued interest as a lump sum after the moratorium ends, which can restore both the original EMI and tenure. Use the loan repayment calculator to compare payoff timelines, or the amortization calculator for a full payment schedule.

Frequently asked questions

Does a loan moratorium waive interest?
No. A moratorium only defers EMI payments. Interest continues to accrue on the outstanding balance for every month of the pause.
Is it better to capitalize interest or extend loan tenure?
Capitalizing raises your monthly EMI but keeps the original end date. Extending tenure keeps EMI manageable but adds months and usually more total interest. The better choice depends on your cash flow after the moratorium ends.
Can I pay accrued interest in a lump sum after the moratorium?
Many lenders allow a one-time payment of moratorium interest to avoid a higher EMI or longer tenure. Ask your lender whether this option is available before you accept the moratorium terms.
How is moratorium interest calculated?
This calculator uses simple interest on the original principal during the pause: principal times monthly rate times moratorium months. Some lenders compound interest monthly during deferral; use the deferred payment loan calculator for compound capitalization.
Does a moratorium affect my credit score?
An officially approved moratorium arranged with your lender typically does not hurt your credit score, as long as you follow the revised repayment terms after the pause ends.
Are results stored on a server?
No. All calculations run in your browser. Changing inputs updates the page URL so you can bookmark or share your scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.