Corporation Bank offers a moratorium of up to 18 months on home loans towards under-construction houses. Moratorium loans differ from regular home loans, which have an EMI that begins immediately after disbursement. The regular EMI for moratorium-backed Home Loans does not start until the last payment is made. It may last up to 18 months. The interest is capitalized and added to the principal loan amount by Corporation Bank. As a result, you may be charged a higher EMI amount. 

Let us see this with an example. 

Rate of interest = 8.45% for a loan amount of Rs.10 Lakhs and a moratorium of 18 months

Loan tenure

The number of instalments reduced to

Regular EMI without a moratorium

EMI after considering a moratorium

10 years


Rs. 12,372

Rs. 15,418

20 years


Rs. 8,647

Rs. 10,032

30 years


Rs. 7,654

Rs. 8,719


How does Corporation Bank treat the pre-EMI interest?

Most banks advise borrowers to pay the pre-EMI interest so that their overall interest burden is reduced. Though this is beneficial to borrowers, it doesn’t reduce the principal in any way. But Corporation Bank provides services that capitalize pre-EMI interest and apply it to the principal. During the moratorium period, the borrower does not have to pay the pre-EMI interest every month and this proves to be advantageous to borrowers who would like to save big till their actual EMI starts.