Moratorium EMI Calculator — Loan Repayment After Payment Holiday

Formula

How this is calculated

A loan moratorium (also called a payment holiday or forbearance) is a period during which the borrower is not required to make EMI payments. However, interest continues to accrue on the outstanding balance each month. The calculator compounds interest on the original principal at the monthly rate (annual rate ÷ 12 ÷ 100) for each moratorium month, which gives the capitalised balance at the end of the holiday. This higher balance then becomes the new starting principal for the remaining loan term.

Two approaches are commonly used by lenders after a moratorium. The first — shown here as the "new EMI" — keeps the original tenure unchanged and recalculates the EMI on the higher capitalised principal. Because the base is larger, every future payment is bigger. The second approach — shown as the "tenure extension" — keeps the original EMI unchanged and extends the loan by however many additional months are needed to fully repay the capitalised principal. Both options cost more in total interest than a loan with no moratorium, and the extra interest grows with the length of the moratorium and the interest rate.

This calculator assumes simple monthly compounding on the moratorium balance and standard reducing-balance EMI calculation after the holiday. Actual lender terms may differ — some lenders add accumulated interest in a lump sum or spread it differently — so treat the output as an indicative estimate and verify with your lender.