Build a Case Study on Loan Moratorium Scheme

In the wake of Covid pandemic hitting the countries across the globe, Governments of many countries have taken various measures to reduce the hardships faced by people. On the financial front, loan moratorium is one of the sops offered to borrowers of business or personal loans.

The 3-month EMI moratorium was provided on repayment of term loans under which borrowers will not have to pay their EMIs till 28^th September including the period of 3+1-month extension granted later.

Required to build a case study on loan moratorium scheme .For making a case study, you have to search a borrower within friends or family settings, who has availed a term loan from a bank and also opted for the moratorium scheme. Discuss the details of the original loan and the implications of deferral. You may elaborate as per the information you get, but broadly following details should be included:

1. Original loan size, tenure, EMI size, interest rate, whether fixed or floating interest rate, documents required by bank, collateral offered etc. Show the calculation of size of EMI.
2. Calculate the outstanding principal at the time EMI repayments were deferred.
3. After the borrower opted for the 3- or 6-months moratorium, how were the loan repayments restructured.

Calculate the size of new EMIs and match it with those done according to the bank.

4. Evaluate the impact of moratorium on the cost of borrowing. How much more is interest payable after opting for moratorium compared to the interest under original terms of the loan.

Once you gather the information, draft of your analysis should include the following general sections, but these may differ depending on your personal approach to the case.

1. Introduction: Define the problem and the issues that will be discussed in the case study.
2. Background: Mention in this section relevant facts about the original loan. In this section you may refer to online articles about loan moratorium and discuss the factors that must be considered by the borrower in taking a cost-effective decision.
3. Evaluation of the Case: Do the required calculations and analyze the problem.

Use tables and graphs where ever possible for a better presentation.

4. Conclusion/ Recommendation- Based on the research, give your viewpoint of the feasible and best possible option for the borrower.
5. References.