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When the first wave of the then-unknown coronavirus broke out in the spring, and with it the closure of a number of uncertainties around the world, European leaders are basically considering two types of closure. credit repayment moratorium were introduced.
According to one version, customers themselves could request a moratorium if their payment difficulties arose as a result of the epidemic. Or in the second case, governments have provided a general and automatic deferment of loans for everyone.
In Hungary, the latter prevailed from March 19, when both retail and corporate clients had the option to differ in the same way for each type of loan. And anyone who still wanted to pay off their loan on a contractual basis could do so by pointing it out to their bank.
However, the general moratorium will expire at the end of the year and will only survive for certain strata most affected by the epidemic. Who and under what conditions will receive another deferral of loan repayment until July 1, 2021? And what do others expect? What awaits us at the end of the box?
Once again, the Index answers tortuous questions about the loan repayment moratorium. Attila Bógyi, With the help of the chairman of the Hungarian Banking Association working group, so that no one is unexpectedly surprised and can liquidate their credit operations before they get into trouble.
1. As of January 1, who is covered by the extended loan repayment moratorium?
For the four priority social groups defined by law:
- for those who are expecting or raising a child,
- for retirees,
- for the unemployed,
- for public employees.
From a residential perspective, so far few, approximately 1.6 million, have availed themselves of the moratorium. Based on the tightening effective as of January, the government estimates that around 750,000 may be eligible for the extended moratorium.
2. Does the moratorium automatically apply to all who are entitled to it as of January 1?
In December, banks will, in principle, contact all affected clients with the rules to extend the moratorium on payments, as well as inform them about the ban on joint loans. Regardless of this, it will be worth paying attention to the official pages and information of banks.
Anyone who belongs to one of these groups will continue to be entitled to a moratorium on loan repayments starting January 1. At the same time, banks do not know for themselves whether a given customer belongs to one of the four key social groups or not, so we must indicate this separately.
If someone already knows as an eligible person who wants to benefit from the moratorium from January 1, if possible, notify your bank no later than December 31 and prepare the necessary documents to prove the right. (These are listed later in this article.)
The bank should be notified because most loan repayments are generally made by automatic monthly debit from bank accounts. But we had better prepare, because they will start again immediately with the end of the current moratorium at the end of December.
3. So far we have been talking about individuals. What companies can extend the loan repayment moratorium?
In keeping with the government’s promise, some companies can also count on Moratorium2 for help. The law at the end of October, which extended the credit moratorium, states that the fate of the companies will be revealed in a future decree, but detailed rules have not yet been published.
Businesses are expected to also operate with login and eligibility will need to be verified. Based on past announcements, the loan repayment moratorium is likely to be available in the event of a 25 percent loss of income.
4. Does Moratorium2 change the range of loans involved? What loans can still be used?
The extension will also apply to operations already existing as of March 18, 2020 and already disbursed. None of them were excluded. Thus, the moratorium on payments extended from January 1 is equally valid, among other things.
- home loans,
- mortgage loans,
- personal loans,
- auto loans,
- quick loans,
- credit for goods,
- Credit cards,
- overdrafts,
- student loans,
- corporate loans, etc.
5. Can you change the installment after the moratorium expires and you have to pay the loan again?
According to the rules, after the moratorium, that is, after January 1 and July 1, 2021, the installment paid by the debtor cannot be higher than what he would have paid under the original contract.
Once the moratorium expires, the term must be determined and the unpaid interest accrued during the moratorium must be sprinkled in such a way that their total amount does not exceed what the client would have paid if they had not participated in the moratorium.
– Attila Bógyi, Chairman of the Banking Association working group, told Index.
6. What is the duration of the extension after the moratorium has expired?
In any case, the period will be extended as provided with the time elapsed in the moratorium. Furthermore, the interest sputtering described above also has the effect of increasing the minimum maturity. However, this is unique to each transaction and also depends on the type of loan and the interest rate. For example, with a home loan with a relatively lower interest rate, the effect of maturity increase will be significantly less.
7. What will happen to those who do not belong to any of the four exempt groups but who still have problems with repaying loans?
The so-called Loan Waiver Ban will apply until June 30, 2021, and banks will also have to visit these customers offering them some form of debt protection. The objective in this case is to find a solution between the bank and the client that restores solvency.
The expert of the banking federation warns that if you, as a client, already see that you have or will have payment difficulties in the near future, actively contact your bank because it is much easier to remedy the problem in the initial stage than when the transaction is close to completion.
Half of the retail clients did not use the credit default, but if they got into trouble, they would return immediately: the Secretary General of the Index Banking Association.
8. What does the institution of a credit exemption mean and for whom? What solution can be found if we cannot repay the loan?
This is for those who cannot benefit from an extension of the moratorium from the beginning of the year but cannot pay the amount under the original contract for some reason. In this case, the banks, in cooperation with the debtor, should try to modify the contract so that the debtor can still repay his loan.
The most common option is very similar to a loan repayment default, as banks tend to offer a reduction in the installment, in which case the direct proportional consequence is the extended maturity.
If this still fails, after the expiration of the Moratorium2, after June 30, 2021, banks can terminate the contract.
9. With what proof can we show the bank that we have the right to extend the loan repayment moratorium?
If we provide a data management authorization as a customer, banks can use data from previous credit applications and income data received in the bank account to verify eligibility. In this case, it is not necessary to present the document or papers that prove eligibility.
However, if the bank does not have this prior information, the claimant can prove their right:
For the unemployed:
- A decision setting a job search allowance after October 1, 2020, or
- Certificate issued after October 1, 2020 by the territorially competent employment office of the government office that you have been registered as a job seeker by a public employment agency.
For public employees:
- A public employment contract entered into after January 1, 2020, or
- After January 1, 2020, certificate issued by a public employer regarding the existence of a public employment relationship.
For families expecting a child:
- birth certificate, or
- identity card and address card (together), or
- a certificate of payment of the family allowance issued by a government office, or
- a certificate issued by a government agency regarding the payment of the child-rearing allowance, or
- a certificate issued by the notary of the municipality of regular childcare subsidy, or
- certificate of entitlement to childcare subsidy issued by the district office.
If the child has reached the age of 25, the change to a person with impaired work capacity must be certified by an expert medical body.
In the case of an adopted child, the fact of adoption must be proven by a decision of the guardianship authority.
For a committed child:
- presenting pages 1 and 7 of the Pregnancy Notebook. Time limit: 30 days after the expected delivery date / or
- The 12th week of pregnancy must be certified by a medical certificate. Time limit: up to 30 days after your due date (required due to stillbirth, stillbirth).
In the case of a child with impaired work capacity over 25 years of age, a valid document on the complex qualification or a decision proving the payment of benefits (rehabilitation benefit, disability benefit) for people with impaired ability of work.
For pensioners: (old age pensioner or family member in their own right)
- the decision establishing the pension,
- retirement card
- Certificate issued by the Pension Disbursement Directorate (for example, personal certificate sent for the total amount of benefits paid in the previous year (notification of pension)),
- NYUFIG annual report for the current year,
- if you became a pensioner in the current year, the resolution issued by the DG Disbursement of National Pensions together with the liquidation.
10. To whom, where and how should the certificates be sent?
Considering the epidemic situation, the expert from the Banking Association recommends that we send the documents to our bank mainly electronically. It can be an internet bank or a microsite created specifically for this purpose. By the way, all banks provide information about it.
Those who benefited from the credit default could lose hundreds of thousands of guilders.
(Cover image: János Marjai / MTI)
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