The new law on the credit moratorium designed by the Ministry of Finance makes it possible to postpone the repayment of loans and mortgages at any bank and non-bank provider for up to half a year. Repayments can be postponed by ordinary consumers, self-employed persons and companies. Repayments will be deferred from the first day of the month following a notification to the creditor and a declaration that the reason for taking this step is due to the negative economic impact of the coronavirus pandemic. However, these reasons will not have to be proved and the creditor will not examine them.
What instalments can be postponed?
- Repayments can be deferred for consumer and business loans that were agreed and drawn before 26 March 2020;
- For mortgages, repayment can be deferred only for contracts concluded before 26 March, but they can still be drawn after this date.
The deferral under the statutory moratorium regime applies to loans and mortgages with any bank and non-bank provider. The option to defer repayments does not apply to credit cards, overdrafts and revolving loans, operating leases or loans in connection with capital market transactions. At the same time, repayments are not deferred for loans which were in arrears for more than 30 days as of March 26, 2020.
How long can the repayments be postponed?
The first payment will be deferred in the calendar month following the month in which the deferral will be announced. Therefore, if you announce the postponement of the instalment in April, your instalments will be postponed from May. If you announce the postponement in May, your payments will be postponed from June.
Repayments can be deferred either until the end of July 2020 or until the end of October 2020. The repayment period shall be adequately extended, principally by the period of the deferral. It is also necessary to take into account that the repayment schedule will also be extended by the amount of interest that will accrue during the grace period – this would be calculated by a bank or non-bank lender.
Interest during the deferral
During the deferral period, the debt will continue to bear interest under the contract. Companies will pay this interest continuously even during the deferral of the principal payment. On the contrary, the consumer and the self-employed will pay it later, only after the full principal has been repaid. In addition, the rise of the interest rate for consumers is limited. To date, the interest rate is capped at 9%. Interest accrued during the deferral of repayment will not affect the repayments – these will remain at the originally agreed amount, only the repayment period will be recalculated.
No fees or negative entry in the register
Postponement of instalments under the statutory moratorium regime is free of charge and will not lead to a negative entry in the debtors’ registers, so there is no need to worry that any further loan applications will be complicated due to a delay in the future.