Before we take a loan, it is worth finding out if the bank assumes that the borrower will be assisted in a situation where he has temporary financial problems. This is especially important with long-term loans, when the loan period may be several years or more. We are not able to predict what will happen to us in such a long time. When analyzing our financial situation, we do it in relation to the current time and possibly the next few years. However, we can never predict random events that are sudden and unplanned. So it’s good to approach the matter responsibly and check the bank also in this regard and check whether it has products such as credit holidays or installment grace period.
What is the difference between a credit holiday and a grace period?
Both of these banking products are intended to defer the installment repayment date. However, what is the difference between a credit holiday and a grace period? By granting us credit holidays, the bank defers us the installment payment date in full. In the case of a grace period, the payment of the principal part of the installment is postponed. We still have to pay off interest on time. However, in many cases this solution is still very beneficial. When we are at the end of the loan period and we only have the principal part to repay, we are in the second part of the loan period and the installment interest rate is much lower than the principal one, or we repay the loan with decreasing installments is a good solution for us. Credit holidays are a salvation whenever we can’t afford to pay the installment and we are looking for a way to postpone the repayment deadline so that we can easily stand on our feet without risking trouble in the bank.
For how long can the bank postpone loan repayment
In the case of both loan holidays and installment grace period, the period for which the bank defers us to pay the installments is from 1 month to even 12 months. We have a chance to get one of these banking products only if we have not had any problems with the bank and we have paid all installments on time. In addition, the bank grants loan holidays or grace period in paying installments to proven and exemplary clients. Therefore, it requires you to apply for postponement of the installment payment date, for timely repayment of a minimum of 12 loan installments. It may be a longer period. Everything depends on the bank.