When applying for credit holidays and grace period in installments
Especially when we have a long-term loan in our account, we are not able to predict everything. Taking a loan the amount of the monthly installment is not a problem for us. We also did not know that in 5 years we would suddenly lose a well-paid job, and it would take a while to find a new one. When there are temporary financial problems, there is nothing to wait for.
Banks approach people who report their financial problems in advance, and not without any information simply cease to repay the loan because they can not afford it. If unexpectedly in our life there are problems with financial liquidity, it is worth applying to the bank for a credit holiday or grace period in the payment of installments.
What are credit holidays and grace period in repayment of installments
Both of these products are intended to provide a break in repayment of the obligation. When the bank gives us credit holidays, it defers the repayment date of the loan installment. Grace period in repayment of installments is a postponement of the repayment date of the capital part of the installment. Thus, in the latter case, the interest part of the installment will remain to be repaid, which is why it is only profitable in some cases.
When the bank gives them to us
Both credit holidays and grace period in installments are granted to exemplary bank clients, ie those who have not had any problems so far. If we have paid off any installments on time, we have very good chances of favoring the bank. The most frequently required is also a period of minimum 12 months of repayment of obligations in order to be able to apply for a credit holiday or grace period in installments.
Is it profitable to use credit holidays and grace periods in the payment of installments
As we said, credit holidays postpone the payment deadline for the entire loan installment. If we can not afford repayment of the installment, it will always be a better solution than simply not paying the loan and generating additional costs in the form of interest on late repayment. It is different in the case of grace period in installments. It is worth using this product at the end of the loan period, when the loan capital itself was repaid to us. When we are in the second part of the loan period and the interest part of the installment is much smaller than the capital part, or when we use the loan with decreasing installments.