Moratorium
Also called Repayment holiday
A set period when a loan needs no repayment, though interest usually keeps adding up.
A moratorium is a break from repaying a loan. It’s most common on education loans, where no EMI is due while you study. The catch: interest usually keeps running during the break, so the loan grows before your first payment.
Questions people ask
What does moratorium mean on a loan?
A moratorium is a stretch of time when you don't have to make loan repayments. Education loans commonly have one covering the course, so you start paying only after you finish studying.
Does interest stop during a moratorium?
Usually not. Interest normally keeps adding up during the break, so you owe more when repayments start. Paying just the interest during the moratorium, if you can, stops the loan from growing.
How long is an education loan moratorium?
It varies by lender and scheme, and usually covers the course period plus a short time after. Check the exact length in your sanction letter and Key Fact Statement.
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