Last Updated on April 3, 2020
Use this free EMI Moratorium calculator to understand how much you would lose (pay extra interest) if you opt for the three month EMI holiday offered by your bank under the directions of RBI.
We have already discussed why you should not opt for RBI’s EMI moratorium & defer loans by 3 months. Here is how EMI holiday works. First, let us understand how loan amortization works. That is, how a loan gets paid off. Those interested in a flexible loan amortization spreadsheet can get one here: Excel Home Loan Amortization Schedule Template. The EMI Moratorium Calculator in this article is derived from this template.
Once the EMI for a loan is calculated – just like an MF SIP: Understanding Loan EMI Calculation as a Monthly SIP Investment! – it has two components: the interest which is equal to outstanding balance x (loan interest/12) and the rest of the EMI is the principal.
After each EMI is paid, the principal component is deducted from the loan outstanding. While the EMI is constant each month, the principal and interest components change as shown below.

These are the associated numbers. Initially, the EMI is dominated by the interest

How EMI Moratorium Works
Suppose we avail the EMI moratorium offered by the bank for the 7th, 8th and 9th months. That is the EMI for those months is set to zero. However, the interest will accrue.

For the 7th month, the interest on the outstanding balance of Rs. 9,68,407 in the 6th month is Rs. 7263. This gets added to the outstanding balance in the 7th month and becomes part of the principal.
For the 8th month, the outstanding balance is Rs. 9,68,407 + Rs. 7263 = Rs. 9,75,670. The interest on this amount is Rs. 7318 which gets added to the balance.
For the 9th month, the outstanding balance is Rs. 9,75,670 + Rs. 7318 = Rs. 982988. The interest on this amount is Rs. 7372 which gets added to the balance.
Now in the 10th month, the EMI resumes. You could ask the bank to increase the EMI and the loan would end as planned or you could pay the same EMI and the loan would get extended. The calculator only considers the latter possibility: same EMI, longer loan tenure. For the numbers shown above, the loan would get extended by 8 months and the excess interest to be paid = 4.14 times the EMI!
This is why banks would happily offer the moratorium or even set it by default! They earn more! This is why you should never accept the moratorium! If your cash flow situation is so bad that you cannot pay the next three EMIs then you may not pay EMIs after the EMI holiday as well! The spirit of the EMI moratorium is lost. Never opt for it!
EMI Moratorium Examples
Example 1
- Loan amount: 10 lakhs
- Loan Tenure: 10 Years
- Interest rate: 9%
- The month when moratorium starts: 7
- Excess interest to be paid if you avail moratorium: Rs. 52,457
- The loan will be extended by (months): 8
- Excess interest divided by EMI: 4.14
Example 2
- Loan amount: 10 lakhs
- Loan Tenure: 10 Years
- Interest rate: 9%
- The month when moratorium starts: 45
- Excess interest to be paid if you avail moratorium: Rs. 29,650
- The loan will be extended by (months): 6
- Excess interest divided by EMI: 2.34
- Since the EMI has lesser interest component in the 45th month than the 7th month, the loss is lower.
Example 3
- Loan amount: 10 lakhs
- Loan Tenure: 5 Years
- Interest rate: 12%
- The month when moratorium starts: 10
- Excess interest to be paid if you avail moratorium: Rs. 45,239 (4.5% of the loan amount)
- The loan will be extended by (months): 6
- Excess interest divided by EMI: 2.03
Example 4
- Loan amount: 2 lakhs
- Loan Tenure: 2 Years
- Interest rate: 25%
- The month when moratorium starts: 2
- Excess interest to be paid if you avail moratorium: Rs. 20,452 (10.23% of the loan amount)
- The loan will be extended by (months): 5
- Excess interest divided by EMI: 2.03
EMI Moratorium Calculator
This is the screenshot of the calculator with input cells in green.

Download version 2 of the EMI Moratorium calculator (updated 3rd April 2020)
(This is version 1 here you can only set 3 EMI holidays)
References
We now publish both equity fund and debt fund (+ hybrid fund) screeners each month!
Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video! ⇐ More than 415 investors and advisors use this!
Unlock the secrets of successful financial advisors and entrepreneurs with our new course!
My new book for kids: “Chinchu gets a superpower!” is now available!


Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Join our courses in exclusive Facebook Groups!
- 550+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
- Goal-based portfolio management! Join 2220+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content) in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author

About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Your Ultimate Guide to Travel

Free android apps
- All calculators from our book, “You can be Rich Too” are now available on Google Play!
- Install the Financial Freedom App! (Google Play Store)
- Install Freefincal Retirement Planner App! (Google Play Store)
- Find out if you have enough to say "goodbye" to your employer (Google Play Store)