With the virus in full swing, many homeowners losing their jobs or taking large pay cuts, the banks have responded by allowing them to delay mortgage payments. However, the conditions for using the deferral vary. We checked who and under what conditions you can suspend a mortgage in individual banks. Virtually all banks offer the possibility of using this solution via the website or by phone, so this procedure is easy.
In short, it is a proposal that allows you to postpone the repayment of a certain number of loan installments.
How is it in practice? It seems quite easy. However, credit holidays are not a mechanism that banks have developed in response to the COVID-19 pandemic. The solution is known and was already often found in loan agreements, especially those concerning high-value and long-term loans.
However, due to the unusual situation, the banks have modified the terms of using this solution in favor of customers. First of all, they have significantly simplified the procedure so you don’t need to deliver a stack of papers to the bank , in most cases it does not even require the cancellation of the contract, and everything can be done from home by calling or logging into online or mobile banking.
Secondly, the repayment period was extended. Under normal circumstances, you can usually take a credit vacation for a month. In the face of the pandemic, banks have extended this period. Basically, they now offer clients deferment of their loan repayment for up to 3 months, and there are also those that agree to even 6 months.
The Polish Bank Association announced that bank customers have already submitted approx. 200,000 credit vacation applications. A lot, but it’s still a drop in the ocean of loans currently active in Poland.
If you are still hesitating if you should take advantage of this solution, check what your bank offers. In the table below you will find information about the rules adopted by individual banks. Unfortunately, we could only find such a table in Polish.
There are 2 options when delaying payments. It may apply to the entire installment, i.e. the capital and interest part, as well as only the capital part. Some banks offer a choice in this regard, others suggest one of these options.
Why do some banks only postpone the capital installment? As explained by Dr. Piotr Zegadło, first of all banks, by postponing the capital installment, can limit the impact of fraud on the part of customers. Especially now, when virtually everyone can get a credit vacation due to simplified procedures.
Who will not be able to take advantage of credit holidays due to the epidemic?
Although banks have loosened their requirements a lot, there are some restrictions as always. Consumer and housing loans for natural persons and loans to companies will be suspended, but with exceptions
This option will not be available to people who:
– have arrears in their current obligations,
– repay loans under the Rodzina na Swoim program and are still in the period of additional payments,
– repay housing loans to remove the effects of floods, landslides and hurricanes from subsidies from Bank Gospodarstwa Krajowego.
How much will credit holidays cost us?
The service itself is free, i.e. banks, as recommended by Andrzej Duda, will not charge any fees or commissions for processing applications. However, the costs are generated by postponing the installment payment.
For example, as calculated by HRE Investments experts, if we freeze for three months a loan taken in 2010 for 300 thousand with a margin of 2 percent and whose current monthly installment is 1,500PLN, monthly payments will increase by either 30PLN or 53PLN depending on wether you defer your capitol plus interest or just capital.
So it’s safe to say that in exchange for 3 months loan holiday, it doesn’t increase your future monthly payment in a very noticeable way. Especially for small business owners for whom every złoty is crucial during this incredibly difficult period.
For some, it could mean the difference of keeping open or closing their businesses for good once the virus is over. In many cases, it could also mean being able to provide food on the table for their families.
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