# Question: What Will Be Interest Charged During Moratorium?

## Is loan moratorium good or bad?

Deposits that a bank borrows at a certain rate of interest are lent at a higher rate of interest.

Only when interest on loans is paid can interest on deposits be paid.

Thus, not charging interest on loans under moratorium is a bad idea, especially when deposits remain a major form of saving for the common man..

## What is an example of moratorium?

Taking a simple example, if a loan amount of Rs 1 lakh is released at the start and interest rate is 11% per annum, a total interest of Rs 11,000 per annum or Rs 33,000 for a three-year moratorium period will be accumulated.

## What is the process of moratorium?

All customers who desire to avail the relief under the policy can send an email from their registered mail id to help@idfcfirstbank.com , with your mobile number and loan account number And they will activate the moratorium for the unpaid EMI of March 2020 if any, and for EMI of April and May 2020.

## How much interest does a moratorium charge?

In this process, the unpaid amount is carried forward to the next billing cycle and 2-4 percent interest is levied on it. Should you opt for the three-month moratorium on payment of credit card dues being offered by some banks as a relief measure, after a nudge from the Reserve Bank of India (RBI).

## What is the interest rate on a moratorium period?

Moratorium Calculation Example Using FormulaPrincipal Outstanding (Rs.)Interest Rate (%, p.a.)Extra Interest for 4 months moratorium (Rs.)2 lakh1812,2734 lakh1216,24230 lakh880,8048 lakh1540,7561 more row

## What is meant by Moratorium interest?

Deeper definition The moratorium is a grace period of sorts after the loan amount has been disbursed to the borrower. However, interest accrues during the moratorium period and the borrower must pay it.

## Is interest paid during moratorium period?

Synopsis. During the moratorium, borrower paid interest on the interest, or compound interest. This is because interest due every month got added to the total loan amount.

## Do we have to pay interest during moratorium period?

In a moratorium period, interest will most likely be charged, as opposed to a grace period, where interest is never charged. A moratorium period is a great feature that is offered by lenders to borrowers as it helps them sort out their financial difficulties and then start repaying the loan with a fresh start.

## What happens after moratorium period?

You will need to catch up with loan repayments after the moratorium ends and interest will continue to accrue as usual. However, whether or not interest will be compounded is left to the respective banks to decide. Compound interest is interest that will be charged on interest.

## Is it good to take moratorium?

Experts say borrowers should not go for the relief if they are not facing financial stress. The moratorium is only a deferral for a few months, not a waiver. Banks will charge interest on the unpaid amount. Go for it only if you are unable to pay the EMI.

## What is the moratorium period?

A moratorium period is the time during a loan term when the borrower is not required to make any repayment. It is a waiting period before which repayment of EMIs resumes. Normally, the repayment begins after the loan is disbursed and the payments have to be made every month.