When can we apply for a credit vacation?





An interruption in the repayment of a cash or mortgage loan, i.e. a credit vacation , is a proposal for those who would like to suspend the repayment of their liabilities and monthly installments, for example, to organize the household budget. He hears more and more often that “the mortgage binds stronger than the marriage vow.” Unfortunately, this statement cannot be treated as a joke. The truth is that a loan agreement can tie you in to the bank for good and for bad. Credit holidays are a chance to relax and suspend repayments.

Just as trouble can happen even in the best marriage

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Temporary financial problems may occur during loan repayment. Sometimes, even deferring your loan repayment for a month can help you organize your home budget. Nowadays, banks go out to people giving them many opportunities to adapt the rules of repayment obligations to their current situation. Credit holidays can be taken by almost anyone who has a bank loan. However, the details of the regulation of such offers differ from bank to bank.

The conditions for using credit holidays vary widely and depend on the bank where you repay the loan. In most cases, only borrowers who regularly and timely pay their debts can “go” on credit holidays . The repayment of the next loan installment can be postponed only after the first 12 installments have been repaid. In other words, you can take credit holidays only one year after taking out the loan and paying it back on time.

Another issue concerns the period during which credit holidays can be used

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In this case, the bank’s internal procedures play a big role, which individually determines the maximum duration of the deferral of repayment (the number of months free of repayment of installments) and the frequency of using credit holidays, i.e. how many times during the entire loan agreement you can defer repayment of credit installments.

It is also worth remembering that credit holidays do not release us from the obligation to pay deferred installments in the future. Taking advantage of credit holidays involves [sociallocker] either the extension of the loan period or the increase in subsequent monthly loan installments.  

In both cases, however, one should take into account

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The increase in the total cost of credit by increasing interest costs. (in some banks it is possible to negotiate the terms of deferment of repayment in the context of the amount of subsequent installments or the loan period). As above, after the holidays the total amount of deferred monthly installments will then be added to the remaining loan installments and distributed in a proportionate manner (or into a specified number of installments – each bank approaches this issue individually), both in the case of fixed and decreasing installments.

The loan period also increases. Maybe a few words about the grace period, which is imposed by the bank, it is nothing more than a suspension in repayment, which relates to the capital part of the installment while the interest installment is still being paid. The grace period in the initial loan period is unfavorable, because then we repay the largest part of the loan. To sum up, a holiday from credit installments can also be pleasant. [/ Sociallocker]