A loan moratorium is a temporary suspension or deferment of loan repayments granted by lenders during times of financial stress or crisis. While it offers relief to borrowers, it’s important to understand both the pros and cons before opting in.
At Vizzve Finance, we help you navigate loan moratorium options smartly to protect your finances and credit score.
What is a Loan Moratorium?
A loan moratorium allows borrowers to pause EMIs for a specific period without being declared in default. This can be helpful during emergencies like job loss, natural disasters, or pandemics.
Pros of Loan Moratoriums
Immediate Financial Relief: Temporarily frees up cash flow for urgent needs.
Avoids Default: Keeps your loan account current without penalties.
Maintains Credit Score: Timely opting in prevents negative credit reporting.
Stress Reduction: Gives you time to stabilize your finances.
Cons of Loan Moratoriums
Interest Accrual: Interest continues to accumulate on the outstanding principal, increasing the total loan cost.
Longer Loan Tenure: Moratorium extends the loan repayment period.
Higher EMI Post-Moratorium: EMIs may increase after the moratorium period ends.
Possible Impact on Loan Eligibility: Some lenders may view moratorium usage cautiously when assessing new loans.
When Should You Opt for a Loan Moratorium?
Sudden loss of income or employment.
Medical emergencies requiring urgent funds.
Natural disasters or extraordinary events impacting finances.
Temporary cash flow issues expected to improve soon.
When to Avoid Loan Moratoriums
If you have sufficient savings or alternate income to continue EMIs.
When the interest accumulation outweighs immediate relief benefits.
If extending your loan tenure creates financial strain later.
How to Opt In for a Loan Moratorium with Vizzve Finance
Assess Your Situation: Evaluate your ability to repay.
Contact Vizzve Finance: Inform us before missing EMIs.
Submit Required Documents: Proof of hardship may be requested.
Understand New Terms: Get clarity on revised repayment schedule and interest.
Resume Payments Post-Moratorium: Stick to the new plan diligently.
FAQs
Q1. Will a loan moratorium affect my credit score?
If you opt in officially and your lender reports correctly, it shouldn’t harm your credit score.
Q2. Does interest get waived during the moratorium?
No, interest usually continues to accrue on the outstanding principal.
Q3. Can all loans be put under moratorium?
Most personal, home, auto, and business loans are eligible, but terms vary.
Q4. Can I prepay my loan after the moratorium?
Yes, prepayment options typically remain available, subject to lender policies.
Why Choose Vizzve Finance?
Vizzve Finance offers transparent loan restructuring and moratorium options tailored to your needs. Our customer-first approach ensures you get financial relief without hidden surprises.
Published on : 10th August
Published by : SMITA
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