A Moratorium Calculator is a tool that helps users calculate the revised payment schedule of a loan when a moratorium (temporary suspension of payments) is applied. It is particularly useful for borrowers, lenders, and financial institutions to understand how a moratorium affects loan repayment timelines, interest, and total cost.

Key Uses of a Moratorium Calculator:

1. Estimate Revised EMI: Calculate the new Equated Monthly Installments (EMI) after the moratorium period ends. This is essential as the moratorium period often leads to interest accrual, which may increase the EMIs.

2. Determine Interest Accrued During Moratorium: While the principal payments are paused, interest typically continues to accrue. The calculator helps determine the extra interest that has accumulated over the moratorium period.

3. Understand Extended Loan Tenure: Since payments are paused during the moratorium, the tenure of the loan might be extended. The calculator can give you the revised loan term.

4. Total Cost of Loan After Moratorium: It helps borrowers see the overall increase in the total cost of the loan due to the accrued interest during the moratorium.

5. Comparing Pre- and Post-Moratorium Payments: Borrowers can compare their loan status before and after the moratorium, seeing how much additional cost or time they will incur.

Common Input Fields in a Moratorium Calculator:

• Loan Amount: The original principal borrowed.

• Original EMI: The amount you were paying as EMI before the moratorium.

• Interest Rate: The rate of interest applied to the loan.

• Moratorium Period: The number of months for which you are taking a break from loan payments.

• Remaining Tenure: The remaining months or years left on the loan before the moratorium was applied.

Output Fields:

• Revised EMI: The new EMI after the moratorium period.

• Interest Accrued During Moratorium: The additional interest you owe due to the pause.

• Revised Loan Tenure: How much the loan term has been extended.

• Total Loan Cost: The final cost of the loan after accounting for the interest accrued during the moratorium.

Example Scenario:

Imagine you have a home loan of $100,000 with an interest rate of 7% and an EMI of $900 per month. If you opt for a moratorium of 6 months, the calculator will tell you:

• How much extra interest will accrue in those 6 months.

• Whether your EMI will increase or how much longer it will take to pay off the loan.

When to Use It:

• During national emergencies or special financial relief programs, when governments or financial institutions offer moratoriums (e.g., during the COVID-19 pandemic).

• Personal financial strain situations where you are considering a moratorium and want to assess the impact on your future financial obligations.