1. What is Moratorium Interest?

Moratorium interest is the additional interest charged on outstanding loan amounts during a moratorium period when regular payments are suspended. It compensates lenders for the delayed repayment.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( Outstanding \) — Loan amount outstanding (INR)
• \( Rate \) — Annual interest rate (%)
• \( Period \) — Moratorium duration in days

Explanation: The formula calculates simple interest for the moratorium period based on the outstanding principal.

3. Importance of Moratorium Interest Calculation

Details: Understanding moratorium interest helps borrowers anticipate additional costs when opting for payment holidays and plan their finances accordingly.

4. Using the Calculator

Tips: Enter the outstanding loan amount in INR, annual interest rate in percentage, and moratorium period in days. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is moratorium interest compounded?
A: Typically no, moratorium interest is calculated as simple interest unless specified otherwise in loan terms.

Q2: How is the period calculated?
A: Period is counted in calendar days during the moratorium, including all days from start to end date.

Q3: Does this include any penalties?
A: This calculates only the interest component. Check loan terms for any additional penalties or charges.

Q4: Can moratorium interest be waived?
A: This depends on lender policies and specific circumstances. Some lenders may offer partial or complete waivers.

Q5: How does this affect total loan cost?
A: Moratorium interest increases the total interest paid over the loan tenure, extending the repayment period or increasing EMIs.