A long-term bank loan is a convenient solution when money is needed for a major purchase. After all, to accumulate funds for the purchase of a car or real estate in modern conditions is quite difficult. But circumstances may change. Reducing material wealth can seriously undermine the borrower. After all, money to pay debt is often not left. The borrower then comes to the aid of the credit vacation – a legislative mechanism for deferring loan payments until the financial condition of the borrower improves.
When is a Credit Vacation Needed?
You can find yourself in a difficult economic situation when faced with force majeure. Financial problems are often caused by job loss, reduced wages, accidents that lead to loss of property or ability to work, and other health problems. In doing so, the borrower is provisionally unable to meet its loan obligations.
If the client has objective reasons for the temporary refusal of repayment of the loan, the banking organizations are quite willing to make concessions. Especially in the case of bona fide proven borrowers. After all, there is a risk for the bank not to receive its money at all. It is much more advantageous and reliable to provide the borrower with a deferred payment for a certain period – until the financial position of the latter improves.
Today, most credit agreements of major banks provide for the possibility of credit breaks. The citizen can use his right at any time – with good reasons and reasons, which are usually stipulated in the contract.
It is possible to get a deferral on credit payments also in cases where this condition is not present among the points of the contract. The borrower needs to contact the bank customer service or their loan manager for this. But in any case, the final decision (as well as the conditions for granting a deferred payment) remains with the banking organization.
Legally, vacation loans can be provided to borrowers who have signed long-term credit agreements with banking organizations – mortgages, car loans, etc. The duration of the delay may be from six months to four years. In each case, the decision is made individually, based on real circumstances and forecasts. Deferrals may be granted for shorter periods of 1-2 months. In this case, they usually do not use the term “vacation”, but in essence, there are no differences.
To obtain a credit vacation, you must contact the bank’s customer service with a statement. It is also necessary to submit a package of documents: ID, taxpayer code, credit agreement and other documents confirming your difficult financial situation. It can be a work book with a note on dismissal, an excerpt from a medical card, etc.
How much will a credit vacation cost?
Of course, it is not profitable for banks to refuse payments from borrowers. Moreover, they continue to use the borrowed money. Therefore, banking organizations provide a deferral under certain conditions. Usually several schemes of operation of this mechanism are used:
- The amount of debt is increased by 15% or more once. The payment schedule is recalculated. The client starts making payments after the grace period.
- There is a pause for payments on the principal debt, while the client continues to pay the interest accrued by the bank.
- The borrower pays a single lump sum one time for the right to use the credit vacation.
- The loan agreement is subject to restructuring with an increase in the loan term and a decrease in the monthly payment.
- In each case, the bank and the client come to an agreement on the terms of providing vacation benefits.
Special terms of credit agreements for the military
Special conditions for repayment of loans are established for military personnel and ATO participants. These categories of citizens are completely exempt from penalties – penalties for late payment and payment of interest on the loan. Previously, this initiative was exclusively voluntary on the part of some banking organizations, today it is a law.
According to him, for mobilized, servicemen and residents of the anti-terrorist operation zone it is provided:
- Exemption from the accrual and payment of penalties, principal payments and interest.
- Participation in special assistance programs for repayment of principal and interest.
- Debt restructuring of loans with voluntary full or partial repayment of debt.
- All categories of citizens covered by this law are entitled to require the provision of credit breaks and preferential terms of repayment of a loan in banks.
To do this, contact the department with the following package of documents:
- Passport and taxpayer code.
- Copy of military ticket with date of mobilization.
- Requesting a deferred payment or other credit agreement benefits.
If a citizen who is in the service and coming under the law can not contact the banking organization on his own, he can do it through his representative, the latter in this case is obliged to provide a notarized power of attorney indicating the authority to amend and sign a loan agreement.
What if the bank refuses to provide credit?
If the borrower of a serviceman and his application falls under the aforementioned law, then the next step after applying to the bank and refusing to restructure the loan or providing a deferred payment – is to go to court. Practice shows that the courts have recently been willing to stand up for the protection of the rights of servicemen, ATO participants and residents of the war zone.
In this case, when applying to the bank with the application, the latter is recommended to be made in duplicate. After submitting the application and the required package of documents to the bank employees, require them to sign and stamp the date of issue on your (second) copy of the application. It is advisable to contact a lawyer or a lawyer to attach a claim, enclosing a copy of your application with the bank.
The idea is that any citizen who has been refused a credit break may apply to court, if there are objective circumstances. But there are subtleties here, as not all aspects are clearly and thoroughly spelled out in the legislation of the country, and the jurisprudence on such cases is still relatively small.
Loan for repayment of microloans
In any case, even if you decide to go to court and achieve the bank’s legal obligations, it is advisable not to refuse payments, if possible. The fact is that the court may decide not in your side, and you will face even greater debt obligations.
In addition, the fact that you continue to fulfill your credit obligations in good faith, despite circumstances that may not be in your favor, can be a good argument in a court that will take your side. In case of a decision in your favor, all “overpayments” will eventually be compensated and you will be able to get your money back.
The best way to quickly find the money to pay off a loan is a micro loan, which can be issued and received in the shortest possible time and with a minimum package of documents. Moreover, many microfinance institutions (MFIs) today offer preferential lending to certain categories of citizens, to which military personnel also belong.
Online lending service offers fast loans to the public with the possibility of registration and receipt on the day of circulation. You can apply on our official website, spending no more than 10-15 minutes. After the same time, you will be able to receive a response about the decision, and if approved, the money will be transferred to your account or bank card almost instantly.