In the wake of Covid pandemic hitting the countries across the globe, Governments of India 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. Impact of loan moratorium is a practical application of the concepts of BUS 249- Introduction to Finance. 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.