Holiday Period Interest

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15 July 2011 Wats the meaning of Holiday period interest?Wat impact does it ve on EMI?

U S Sharma

U S Sharma (Expert)
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16 July 2011 holiday period means for repayment only, not for accural,

it means the bank is making entries of interest added to your loan but not asking to pay or pay EMI, which will start after holiday period only

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Guest

Guest (Querist)

16 July 2011 Tat means it has no impact on EMI & scheduled period of loan.
Though there will be non repayment of EMI's during this Period ,interest will be calculated for further EMI on principal balance outstanding after considering Holiday period EMI(principal amt part as paid)??

U S Sharma

U S Sharma (Expert)
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16 July 2011 .In case the loan is sanctioned for construction of house, maximum period of 18 months or 1 month after completion of house / taking possession of flat / house, whichever is earlier is allowed as moratorium period when EMI is not required to be paid and only servicing of interest, as & when applied, is required. In case of loan granted for outright purchase of readymade house, EMI is to be paid from the next month of sanction of loan.

https://www.bankofbaroda.com/pfs/homeloan_faq.asp#Ans8

U S Sharma

U S Sharma (Expert)
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16 July 2011 https://finance.taaza.com/topic/moratorium-period-wiki

Guest

Guest (Querist)

16 July 2011 i got ur point as far as Holiday period is concerned.
Logically Every non payment of installment will lead to increase in outstanding balance.
Does bank consider holiday period non repayment as repaid for calculation of further period interest, tats the only question.

U S Sharma

U S Sharma (Expert)
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16 July 2011 when banks allow holiday they declare terms in clear words, it varies bank to bank, some ask to remit interest at intervals, some allow deferment of interest also.

follow the bank terms to avoid any complication in future

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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16 July 2011 It is very simple. Say you have taken a loan for a house to-day and the house will be ready within say 6 months. The repayment shall start only after 6 months and your EMI shall start from 7th month. Here 6 month's period is called holiday period but do not think that you are not charged with the interest. The interest for the 6 months shall be charged and included in your EMI.

Hence, once your EMI is fixed the holiday interest is included in that and the EMI will not change.

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