A moratorium is a temporary pause or suspension of loan EMI payments granted by the lender.
Detailed Explanation
A moratorium period allows borrowers to temporarily stop paying EMIs without being classified as defaulters. During this period, interest usually continues to accrue on the outstanding loan amount. Moratoriums are often offered during financial hardship, job loss, or economic crises as per RBI guidelines.
Example
"During COVID-19, banks offered a 6-month moratorium on home loan EMIs."