A home loan is a long-term financial responsibility which requires a dedicated financial behaviour. The maximum tenure on the home loan generally ranges between 25 to 30 years. You repay the home loan in Equated Monthly Instalment (EMI), which is the combination of both principal and interest. You must be wondering if the EMI on the home loan you are going to take or have taken starts right after the loan is disbursed.
Repayment on your home loan differs from lender to lender. For example, the repayment on a home loan taken to build your own house may start after a year and for a loan taken to purchase a property might begin right after the next month of loan disbursal.
This is called a holiday period wherein the borrowers are not required to make any repayment. This is also called repayment period. However, your interest starts accumulating even though you EMIs don’t start. The moratorium or grace period is decided by the lender. The maximum duration of is up to 18 months. For higher duration, you can check with the bank.
You can also start repaying your home loan during moratorium period which can help you cut down the interest rate accrued during such periods.