Credit holidays or grace period?

Many unexpected events can thwart our plans and prevent us from paying the next loan installment. Particularly in the case of mortgages that are incurred for many years, we are not able to predict what will happen during this time. We can (knock!) Lose a job, someone in the family may have serious health problems, or we have simply promised a family vacation together, and the wallet has shortages. Banks are aware of these unfortunate situations that can affect us and meet us by offering credit holidays and grace periods. These two methods are used to temporarily increase our savings, but it should be remembered that when choosing one of these options we have to take into account certain consequences. At Simon Legree Now, we’ll show you the most important differences between credit holidays and pay-back periods,

First, let’s look at these two very different tools and analyze the differences between them. First of all, we must remember that before any decision related to the delay in repayment of the loan installment, we must go to our bank and inform him about our problem. Of course, it may happen that the bank does not agree to suspend repayment, which may be related to our insolvency, not very good credit history or permanent arrears. Once the bank agrees to postpone the next installment of our loan, we usually have two options: credit holidays and grace period. These tools are extremely helpful not only in terms of mortgage loans, but also cash loans.

Credit holidays

Credit holidays

Credit holidays are a temporary suspension of payment of the entire loan installment (its principal and interest parts). It should be remembered that many banks grant credit holidays for a strictly defined number of months in the year or throughout the loan period.

Payment grace period

Payment grace period

In the case of a grace period, we are talking about temporary suspension of the necessity to repay the capital part of our loan installment, while interest must be paid on time. For this reason, this option is usually used by people who have been paying back their loans for a long time. This is of great importance when choosing a more attractive suspension arrangement for repaying our loan, because in the initial repayment period, interest is a large part. Therefore, grace period will not be a good option for all borrowers.

Is it worth using them?

Is it worth using them?

It all depends on the terms and conditions of using a credit holiday or a grace period, which depends on the individual policy of each bank. Of course, it is always better to settle all repayments on time, as any delay will sooner or later affect our portfolio. Let us remember that unpaid capital will generate additional interest. In addition, it is also worth familiarizing yourself with the available methods of repayment of unpaid loan installments, which are usually offered to us by banks. The first is a proportional increase (temporary or permanent) in the amount of our installments. The second option is to extend the loan period by the time in which you were overdue.

Another important thing to keep in mind are the possible costs of choosing these solutions: the cost of an annex to the original contract, which can sometimes amount to several hundred dollars; increased interest resulting from a longer loan repayment period or commission for granting a grace period or loan holidays. To sum up, let’s use these solutions only in urgent cases or in other random events that prevent us from paying the next loan installment. In other cases, when we lack the money to go on an exotic vacation or buy a dream gift for our child, let’s not postpone repayment of our loan.

Where is the best to borrow USD 3,000

The amount of USD 3,000 is a large amount of money for most of us, which cannot be saved from one monthly salary. That is why a loan for USD 3,000 is one of the most often paid out by both banks and private loan companies. Let’s check where to borrow USD 3,000? In the bank.

Each bank is a public trust institution governed by law, which is supervised by the PFSA (Polish Financial Supervision Authority). Banks are obliged to act not only for the benefit of their own interests but also for the benefit of consumers. Therefore, if we intend to obtain a cheap loan, it is best to use the bank’s services. There are relatively many of these in our country today – so there is plenty to choose from.

The amount of USD 3,000 is a small amount for the bank

Such a loan can be obtained in the form of consumer credit (e.g. cash). When looking for the best offer for this type of loan, it is best to be guided by the APRC (real annual interest rate), which includes all debt costs, so in addition to interest (nominal interest), a commission for the bank, a preparation fee, and insurance. Banks grant loans divided into monthly installments.

In a non-bank company

When deciding on a loan in a private company, be prepared for the high costs of obtaining debt. In this case, however, we can choose not only installment loans but also payday loans, i.e. short-term loans that must be paid back in full within a specified period, usually not exceeding 30 days. Private loans are characterized by a minimum of formalities and high granting.

The great advantage is also the speed of customer service, which is able to raise money even within a few minutes of submitting an online application. Currently, the market for non-bank loans is very competitive, which also translates into the amount of costs of this type of service. It is much cheaper to borrow money on the parabank today than it was a few years ago.

With family/friends

With family/friends

Of course, the cheapest we can get money from family or friends. In addition to this, you can borrow money without costs, no one will ask us about the amount of income, and also will not check our history credit. However, this solution has more disadvantages than one would expect.

It is worth remembering that loans are one of the most common causes of family disputes. When using a loan with family or friends, we also run into uncomfortable questions that the lender may ask. Another problem may arise if you need to extend the repayment time, or when a relative or friend asks for a refund before the set date.

Loans without spouse’s consent

They decided to get a loan without the spouse’s consent on the best terms, and then you came to the right place. In front of your eyes are all the best deals on such a loan, and below is everything you need to know before applying for it.

Naturally, everyone can have different questions

Naturally, everyone can have different questions

After all, we always understand a loan as an individual transaction between a lender and a borrower; between the creditor and the borrower.

But for some time now, as in Lithuania, this is no longer a purely personal matter. Now, before granting a loan, the creditor is obliged to check not only the financial status of the borrower, but also his / her spouse.

Why Loans Without a Spouse? Why these changes?

Why Loans Without a Spouse? Why these changes?

The Bank of Lithuania, together with its institutional partners, sought to curb the arbitrariness of fast credit lenders and to solve the problem created by their activities. What is the problem? Over-indebtedness. Quick credits were simply granted without much consideration being required.

This meant that many people were getting loans that, rationally, they were not able to obtain. For a while, the situation worked in favor of creditors: people who saw that they would not be able to repay their fast credits were forced to borrow even more. This was very beneficial to lenders as their loan portfolio kept growing and growing.

But the problem here is very obvious: it simply couldn’t last forever. As a result, over time, more and more of these people became insolvent and began looking for loans for debtors. At that time, there were few such loans, so refinancing of the debt was only possible through mutual lending. And there, the conditions for getting such a loan are much stricter.

In an attempt to remedy the situation that already existed and to prevent it from happening in the future, creditors were forced to comply with stricter lending conditions. One such condition is the cancellation of the loan without the consent of the spouse.

It should be easy to understand and logical

It should be easy to understand and logical

People borrow individually, but personal income almost always goes to the family budget. This budget then handles various financial matters. Therefore, for example, if a person has no obligations but his or her spouse is drowned in debt, this practically means that the whole family is in debt. In other words, this means that even if a person has no obligations, they will still be under pressure because their spouse has them.

For this fundamental reason, it was decided that loans could not be granted to anyone and under any circumstances without the consent of the spouse. There really is, because eventually, the spouse will still have to contribute.

But that doesn’t really mean that getting a loan without a spouse is impossible. On the contrary, there are many possibilities. It all depends on how much the loan is being asked for, how much the person is now in debt, whether he needs refinancing or regular quick credit, etc. As for the average, statistic who is not over-indebted and has a stable income (because with loans without income, again it is otherwise), then getting a loan without the consent of your spouse will certainly not be difficult.

Can I go abroad having debts? Will they stop me?

Can a bailiff take over my account? Can they stop me for these debts at the border? I have debts from loans and payday loans. I am afraid that I will not be able to enter Switzerland and that I will not have a normal life there, and just want to leave, earn and give money.


Trip to Switzerland, and debts in Poland

debt problem

Hello, I am not surprised that you are worried that due to unpaid debts, your plans related to leaving Poland may change or not be realized at all.

Quite often, you hear about stops at the border during the ticket control. However, I want to comfort you that the Border Guard has the right to detain a person only in strictly defined cases.


Stop at the border for bank debts, is it possible?

bank debts

The grounds for detention at the border may be:

  1. arrest warrant
  2. court order for forced delivery
  3. European arrest warrant.

As far as the arrest warrant is concerned, it is obviously a criminal conviction. The situation is similar with the European Arrest Warrant. It will be different if the court orders a forced delivery. The order for forced delivery may also apply to civil proceedings, including when a witness in a given case avoids appearing in court.

However, in the case of private debts, including those related to loans, loans and payday loans, it is not possible for the debtor to be detained at the border. Unless criminal proceedings are pending against the debtor, including extortion of credit. Even the involvement of a court bailiff in the debt recovery process does not give the creditor the right to apply for the arrest of the debtor. Colloquially speaking – you don’t go to prison for debts in Poland.

If you don’t have any criminal matters, I don’t see the possibility that your trip to Switzerland will be difficult because of your debts.

Consider, however, whether you are not a debtor of the Treasury, because here you only need one unpaid fine, eg for exceeding the speed limit, to have problems with departing from the country during airport checks.


Traveling abroad and bailiff execution

Traveling abroad

Regarding bailiff enforcement, the matter is that a Polish bailiff can only carry out enforcement proceedings in our country.

Your trip may block his ability to act, but not necessarily.
Because despite the fact that you will not be in Poland, the bailiff can continue execution of the bank account, of course, in the Polish branch of the Bank (the bailiff is not able to locate or seize the debtor’s bank accounts in foreign banks) .

Therefore, if the bank account has already been attached, the bailiff will not release him for the next few months, and when you make a payment to the account in question, you must reckon with the fact that all funds over the amount free of attachment will be transferred by the bank to the bailiff’s account.

Know that for the current year there is an amount free from attachment on a bank account for the enforcement of non-maintenance debts in the amount of USD 16,850 per month. Therefore, in each new month, when executing from a bank account, the debtor can rotate the amount free of attachment, which for 2019 is 1 687, 50 USD.

So think about which account the money you earn in Switzerland will be transferred to. Will it be a Polish account from which enforcement can be carried out, or will you set up a new bank account there in Switzerland, which the Polish bailiff will not be able to start?


Execution of Polish debts in Switzerland

debt loan

The above regulations significantly facilitated the creditor’s ability to seek payment from debtors residing in another European Union country, because it allows to easily and – what is more – an inexpensive way to receive an order to secure the debtor’s account and seize it until full payment including costs and interest.

The procedure for issuing a European Account Preservation Order can be conducted in all European Union countries except Denmark and the United Kingdom, therefore also in Switzerland. Therefore, as you can see, if you decide to open a foreign bank account, your creditors will have a way to satisfy their claim using EU regulations.


Going abroad, and the obligation to inform the bailiff

Going abroad

Finally, I want to add that since bailiffs are being conducted against you at the moment, you are required by law to notify the bailiff of any change in your place of residence.

I also think that you should send a letter to the bailiff explaining that you are leaving for work in Switzerland.

In the same letter you can also ask the bailiff to remove the attachment from your bank account, and if you know that you are already waiting for work on the spot, you can also declare your own voluntary payments of a certain amount, eg from the next month.