Taking a loan, especially a long-term one, we can’t predict everything. Random events have the fact that they happen unexpectedly. Taking a loan, we have a stable job and good earnings. We didn’t know that in a few years we would suddenly lose her. However, we have a headache and our financial problems are only temporary. In this situation, credit holidays or a grace period in paying the installments can help us. It will give us time to stabilize our home budget, we will not have to worry about credit and any problems with the bank.
Payment grace period and credit holidays
Both of these products are to help us in a situation of financial liquidity problems. When something happened to us that prevents us from timely repayment, e.g. unexpected job loss or health problems, when the money is needed for something else. We can apply to the bank for a grace period in payment of installments or credit holidays. At our request, the bank may postpone the repayment date. Payment grace period, deferral of the principal part of the installment. Credit holidays are to postpone the repayment date of the entire installment. Due to the fact that with the payment grace period we still pay interest on the loan, the bank is more willing to grant it than for loan holidays.
Who is the solution for?
It should be remembered that not every bank has a grace period in paying installments or credit holidays. Therefore, before signing the loan agreement, it is worth finding out whether a given bank offers assistance in the event of a borrower’s temporary financial problems. Both of these products are granted for a period of 1 to 12 months, at the request of the client, by a separate agreement. Chances for receiving a credit vacation or a grace period in paying installments are primarily for people who have so far repaid the loan installments on time, had no problems with the bank and already repaid some part of the loan (most often it is a minimum of 12 installments paid on time).
How it’s working
When the bank granted us loan holidays, the amount of deferred installments may be added to us in proportion to the other installments of the loan, the sum of deferred installments may be added to the last installment of the loan or the loan period may be extended to us as long as the loan was interrupted. The situation is similar in the case when the bank grants us a grace period in paying the installment.