Which Is More Beneficial? Paying EMI or Availing Moratorium?

Home loans have emerged as one of the most important steps for acquiring a residential property of one’s desire. With enhanced features and benefits, housing loan has become an affordable option for several potential homebuyers. Also, the repayment process, involving home loan EMI, is straightforward, thanks to the flexibility of tenor.

However, one may wonder whether it is the best option to stick to paying predictable EMIs or avail a moratorium period for EMI payment. While both these procedures have their own features and advantages, each choice has a long-term financial impact. Thus, the best way to determine the better option is to study the advantages of both EMI payment and moratorium.

What are the benefits of EMI payment?

EMI repayment procedure presents a financially viable way to acquire a desirable residential property. With EMIs, individuals can thus significantly reduce an immediate financial obstacle that presents itself in the way of purchasing a house.

Therefore, the most prominent benefits of home loan EMI include the following pointers –

• Consistent and predictable payment – Several individuals use a home loan tenure calculator online to gather an idea about their repayment obligations. This tool actively helps them to know about the total loan amount, the principal component and the interest component. Therefore, individuals become aware of their EMI amount for the rest of the tenor. This enables an individual to chalk out their financial strategy after taking into account his/her other economic liabilities.
• Takes closer to the home loan tenor – EMI payment involves repaying the principal dues and accrued amount of home loan interest rates. Therefore, individuals can do away with their loan burden by paying regular home loan EMI that they can afford. 

Additionally, EMI payment also secures one’s financial future by timely amortisation of the housing loan. However, it becomes important to understand how a home loan moratorium period provides a financial benefit to individuals.

What are the advantages of a moratorium period?

Essentially, a moratorium period on a home loan is a grace period. Additionally, financial institutions often refer to it is a ‘holiday period’ since an individual receives temporary relief from EMI liabilities.

Moreover, the advantages of a home loan moratorium period are as follows –

• Opportunity for financial planning – Individuals can leverage the moratorium period and take stock of their financial condition. This helps them plan their financial strategies quite effectively. In this period, they can direct their financial flow from EMI repayment to some other urgent requirement.
• To finance residential expenses – Moratorium on a home loan is an ideal period to save up for home décor and furniture. In case individuals have moved into a newly constructed home, they can use EMI amount to fulfil related expenses. These include stamp duty and registration fees of the real estate property. If loan applicants can plan their finances to buy a home effectively, moratoriums are greatly beneficial.

Therefore, individuals should carefully analyse their own financial needs and choose the most suitable option for them. Additionally, they should opt for housing credit from reputed lending agencies to benefit from affordable interest rates. They can also procure high-value home loans up to Rs.3.5 crore to finance their requirements.

Some reputed lenders provide pre-approved offers on secured debt instruments such as home loans and loan against property. With these, people can significantly save time and energy during the approval process. You can check your pre-approved offers just by entering your name and basic contact information.

Therefore, individuals should choose for themselves whether they want to walk the path of consistent home loan EMI payment or temporary financial relief. Besides, they should adjust their economic strategy for any repayment option that they choose.