Moratorium vs. Grace Period

Before jumping into the difference between the Moratorium vs. Grace Period first we need to under what they mean actually so let’s understand one by one.

  1. Moratorium period:
    It is a period under which the borrower is allowed an exception for a certain period of time, the borrow is obligated to pay his bills, In simpler words, the borrower is provided a time frame to repay his debt after a given period of time, there won’t be any sort of additional charge on laps of payment.
    RBI is the one who acts as a governing body for the all moratorium period.
    The Moratorium period is provided on the term loan like it may be a Home loan, Vehicle Loan, EMI’s, etc
  2. Grace Period:
    The grace period is the time frame provided to the customer to pay his dues before the deadline once the deadline is over there will a certain charge availed on the customer.
    EX: If you bought a TV on a credit card, you will be provided with 25 days of time limit to clear your dues, (25 days are known as a grace period) if you were unable to pay within 25 days you will be liable for a specific rate of interest according to the banks.


Difference Between Moratorium vs. Grace Period



Moratorium Period

Grace Period

Application Option for Member No need to apply
Payment Covered Payments For 3 Months Payment due for 30 days
Penalties None None
Interest On the basis of the delay of the due date None
Payment Covered Term Loans Term loan, EMI, ETC
Basis Offer By The Government on the basis of need Offered By The Bank



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