Calculate the interest accrued during a loan repayment moratorium, the revised principal afterward, and the recalculated monthly payment for the remaining term, revealing the true cost of deferring payments.
Input Data
Results
At a glance:During a moratorium, interest keeps accruing on the outstanding balance and is capitalised into a revised principal, raising the post-moratorium monthly payment.
Formula
accruedInterest = outstanding × (1 + annualRate%/12)^(moratoriumMonths) − outstanding
newPrincipal = outstanding + accruedInterest
revisedEmi = newPrincipal × r·(1+r)^n / ((1+r)^n − 1) (r = annualRate%/12, n = remainingMonths)
$$i = \\dfrac{\\text{Annual rate}\\%}{12}$$How to Use
- Enter the outstanding loan balance.
- Enter the annual rate and moratorium length in months.
- Enter the remaining months after the moratorium.
- Review the accrued interest, revised principal, and revised monthly payment.
FAQ
What is a repayment moratorium, and is it really 'free' not to pay?
A moratorium, also called a payment holiday, lets you pause or reduce instalments for a period — common relief during unemployment or hardship. But it is not free money. In most cases the lender still charges interest during the break and rolls it into the principal, so you owe more when it ends. Using this tool's model (balance 500,000 at 9% for a 6-month break), about HK$22,926 of interest accrues and the revised principal rises to about HK$522,926. You are not saving that interest — only deferring it, and it keeps earning interest. The moratorium's real purpose is breathing room when cash flow is tight, not debt forgiveness.
Why do I pay more per month after the moratorium, and does the term get longer?
Because the principal has grown from accrued interest, you now owe more. Lenders typically handle it two ways. The first (this calculator's model): the term stays the same but the EMI is recalculated on the larger principal, so the monthly payment is higher. The second: the monthly payment stays the same but the term is extended, meaning you pay for longer and more total interest. Either way the cost is real. This tool shows the 'same term, recalculated EMI' case; if your loan extends the term instead, the total-cost logic is the same.
What should I watch out for, and should I apply for one?
This calculator uses a generic model — interest compounding monthly during the break and a recalculated EMI after — but real products differ. First, the interest method may vary (some use simple interest or park the interest separately), so actual figures differ. Second, the post-moratorium arrangement may differ (extended term vs recalculated EMI). Third, a formally approved moratorium usually is not recorded as a default, but the lender may note it on your credit report, so confirm the impact. Fourth, it is relief, not a discount — your debt does not shrink and total interest usually rises. Use it as a short-term rescue to avoid default; if you have no real need, keep paying normally to save interest. Treat results as estimates and confirm the lender's terms.
Does a moratorium affect my credit record, and is it worth it?
A lender-approved moratorium carried out as agreed is generally not flagged as a missed payment, so the direct hit to your score is limited; the lender may, however, note on your credit file that you took one, which some institutions consider later. The serious damage comes from simply stopping payments without applying. Whether it is worth it depends on the trade-off: the benefit is avoiding default during a cash crunch; the cost is continued interest, higher or longer payments and more total interest. If you are only temporarily short (e.g. a few months between jobs) and expect to recover, it is often worth it — better than default and losing collateral. If you are chronically overstretched, a moratorium only delays and amplifies the problem; consider debt restructuring or counselling instead. Use this tool to confirm you can actually afford the revised payment first.
Does the moratorium interest compound or accrue simple, and how much difference does it make?
It varies, and the gap widens with a longer break or higher rate. This calculator uses monthly compounding (closer to most loans): revised principal = balance × (1 + monthly rate)^months, so each month's interest is added to the principal and earns interest next month. Under simple interest, only the original balance is charged each month. At 500,000, 9%, 6 months: compounding gives about HK$22,926 of interest, simple interest gives 500,000 × (9% ÷ 12) × 6 = HK$22,500 — a difference of about HK$426, small over 6 months but much larger over one to two years or at higher rates. Always ask the lender whether they use compound or simple interest for the moratorium and how the accrued interest is handled.
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.