Credit holidays. How to apply, how long they last and for whom

At the end of July, regulations will come into force allowing borrowers to take advantage of additional statutory loan holidays. We recall the most important principles of this mechanism and the strategies that can be used.

On July 14, 2022, the President signed into law legislation to help crowdfunding and borrowers with previously announced government-backed mechanisms to pay off housing obligations. The solutions will come into effect after 14 days, i.e. on July 28, 2022. Arousing more interest Credit holidaysIt is available to a large group of banking customers. What do you need to know about mortgage deferment?

What are credit holidays?

Based on the mechanism of loan holidays provided by law Postponement of repayment of loan installments. During their term, neither principal nor interest is repaid (this may distinguish “statutory” holidays from the holidays sometimes granted by banks under the contract). The only burden may be the insurance premium.

Using the installment deferral option means that the liability repayment period is automatic (without signing, for example, a bond). If we take a holiday, e.g. For 3 months, the loan period will be extended by 3 months.

Who can avail loan holiday?

Access to deferred home loan repayments is not restricted by several limits. The law does not impose There is no income criterion or criteria regarding the amount of loan installment burden. Mortgage However, it must be provided in PLNThis means that those paying foreign currency loans and those denominated or denominated in foreign currencies cannot use the loan holiday.

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Loan holidays are available for one loan only. The most important limitation is regarding the scope of the loan. Funding must be available Intended to meet own household needs. Therefore, there will be no real estate loans during loan holidays, e.g. for rent. If we pay multiple obligations, we are entitled to defer repayment only for one loan taken for residential property.

How many installments can be deferred? How long do loan holidays last?

In total, loan holidays can have 8 installments. However, the law imposes “windows” several times:

• August 1, 2022 to September 30, 2022 – maximum two installments;
• From October 1, 2022 to December 31, 2022 – Maximum of two installments;
• January 1, 2023 to December 31, 2023 – One month installments in every quarter.

How to take advantage of the loan holiday?

Suspending repayments is not automatic and requires an application by the borrower. The law states that the application can be submitted in paper or electronic form. Like the “Covid” credit holidays, the most popular assumption can be contacted in electronic banking.

The application should indicate the borrower, the bank that issued the loan and the loan agreement number. In addition, the required elements are: the requested period or periods of suspension of loan repayment and a declaration of the contract concluded for the application to meet one’s own housing needs.

The lender must confirm receipt of the application within 21 days from the date of issue. In the confirmation, you will see the loan repayment suspension period and the amount of insurance premiums, if any premiums need to be paid in the meantime. What is important, Absence of confirmation does not affect the commencement of suspension of loan repayment. Submission of the application is sufficient to avail the vacation, but must be done before the deferred installment payment date.

How to use funds from deferred installments?

In principle, loan holidays should help borrowers who have experienced sharp increases in installments in recent months. Deferred payments will have to be settled anyway (perhaps at already low interest rates), but temporary borrowers will have a bit of a breather. Funds normally earmarked for repayment of installments can be used for other purposes, e.g. Relating to daily maintenance. However, if we do not feel such a need, it is worth considering the excess payment of the mortgage. We wrote on Bankier.pl about the benefits of such a move.

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