The law allowing for postponement of installments due to coronavirus entered into force
The possibility of postponement of loan repayments for Slovaks affected by coronavirus is guaranteed by law from yesterday. Customers who have lost their jobs or part of their income as a result of the anti-pandemic measures can apply for a one-month delay.
Repayment grace period – The maximum repayment grace period can be up to 9 months. However, clients can determine for how long they want their credit repayment suspended.
Which loans are subject to a delay – By law, a delay of up to 9 months applies to all housing loans, including those from building societies. Banks will also meet the requirements of the consumer credit.
Who postpones installments – Any client affected by loss or fall in income who has not had any problems with repayment of their obligations may apply for postponement of installments. In the case of sole traders and small entrepreneurs, it is a condition that they do not declare personal bankruptcy.
How to apply for deferment – Payments are not deferred automatically. Each client has to ask the bank where the loan was provided. This can be done in person at the branch or via an electronic form.
How much it takes to approve an application – the bank has 30 days to review and then approve or reject the application. If the application is not approved, the law requires banks to give applicants the reasons for their rejection.
No registration – Using a grace period during a pandemic will not have a negative impact on the client’s creditworthiness. Delay is not recorded in the credit register as a breach of payment discipline. Banks will take into account that this was a deferral during the crisis period.
From when a deferral can be requested – The first deferral requests could be submitted as early as April 9th after approval of the law. The deferral shall take effect on the date of the Bank’s approval of the request.
When to submit applications – The deadline has not yet been available for requesting deferral. The law has been passed for an indefinite period and its duration will depend on the evolution of the situation around the pandemic.
The postponement of installments does not only apply to bank loans. According to the law, Slovaks can equip it also for non-bank loans and leases. The conditions are almost identical, only the grace period changes. It will last for 3 months, after which it can be extended by another 3 months.