Calculate the financial impact of a loan moratorium. See how deferring EMIs affects your total interest, new loan amount, and revised payments. Plan your finances wisely with our easy-to-use tool to understand the true cost of a payment holiday.
Formula:
While the exact formula for a moratorium's impact can vary by financial institution, our calculator estimates the effect based on standard loan amortization principles where interest continues to accrue during the deferment period.
Here's a simplified view of the key calculations:
- Monthly Interest Rate (r):
Annual Interest Rate / 12 / 100 - Interest Accrued During Moratorium: This is calculated by applying the monthly interest rate to the outstanding principal balance for each month of the moratorium period, with interest compounding.
- New Principal (Pnew):
Original Outstanding Loan Amount + Interest Accrued During Moratorium - New EMI: Using the new principal, the monthly interest rate, and the remaining loan tenure, a new Equated Monthly Installment is calculated using the standard EMI formula:
EMI = P * r * (1 + r)n / ((1 + r)n - 1)
Where:
- P = Principal Loan Amount (either Original Outstanding or New Principal)
- r = Monthly Interest Rate
- n = Remaining Loan Tenure in Months