Also in 2021, households and businesses can turn to banks for payment deferrals
9 December 2020 - 11 min Reading time
Important: This press release should be read together with the accompanying Charters.
In March 2020, the financial sector announced a first series of support measures to help households and businesses through the difficult period of the coronavirus crisis. Families and businesses could request payment deferrals for a maximum of 6 months, later extended to a maximum of 9 months (with a final deadline of December 31, 2020).
- The sector has decided to continue its commitment in 2021 and provide maximum support:
- Particulieren die zich in financiële moeilijkheden bevinden, kunnen opnieuw betalingsuitstel van kapitaal en interesten vragen voor hun woonkrediet. Dit voor een periode van maximaal 3 maanden. De aanvraag voor betalingsuitstel dient te gebeuren voor eind maart 2021 (en kan dus uiterlijk lopen tot eind juni 2021). De interesten gedurende het betalingsuitstel worden achteraf verrekend. De financiële sector heeft ook opnieuw extra aandacht voor diegenen die het zwaarst getroffen worden door de huidige crisis. Kredietnemers die maandelijks minder dan 1.700 euro netto overhouden, kunnen daarom betalingsuitstel opnemen zonder dat ze intresten op het betalingsuitstel zijn verschuldigd. De banken nemen dit op zich.
- De maatregelen die worden genomen om levensvatbare ondernemingen door de crisis te loodsen, berusten bovendien opnieuw op twee pijlers. Voor KMO's is het zo dat de tweede staatsgarantieregeling wordt verlengd tot eind juni 2021, en zal worden uitgebreid voor kredieten met een langere looptijd, met name tot 5 jaar.
- Bovendien krijgen ondernemingen opnieuw de mogelijkheid om betalingsuitstel van kapitaal aan te vragen voor hun ondernemingskrediet. Het betalingsuitstel kan worden aangevraagd voor maandaflossingen/vervaldagen in januari, februari en maart 2021, en kan lopen tot uiterlijk 31 maart 2021. Banken raden ondernemingen aan om nu reeds in gesprek te gaan met hun bank, zodat op die manier naar een meer structurele oplossing op maat gezocht kan worden
- Individuals facing financial difficulties can once again request payment deferrals for capital and interest on their mortgage loans for a period of up to 3 months. Applications for payment deferrals must be made by the end of March 2021 (and can, therefore, run until the end of June 2021 at the latest). The interest accrued during the deferral period will be settled later. The financial sector also pays special attention to those most severely affected by the current crisis. Borrowers with a net monthly income of less than 1,700 euros can take payment deferrals without accruing interest on the deferred payments. Banks take care of this.
- The measures taken to support viable businesses through the crisis are once again based on two pillars. For SMEs, the second state guarantee scheme is extended until the end of June 2021 and will be expanded for loans with a longer term, specifically up to 5 years.
- Furthermore, companies are once again given the opportunity to request capital payment deferrals for their business loans. The deferral can be requested for monthly installments/maturity dates in January, February, and March 2021 and can run until March 31, 2021, at the latest. Banks advise companies to start discussing their situation with their bank now so that a more tailored and structural solution can be found.
- Banks will not charge file or administrative fees for this payment deferral.
- The total duration of payment deferrals, granted and ongoing in 2020, and the new payment deferrals in 2021, may not exceed 9 months in total. This applies to both mortgage loans and business loans. This follows a European decision aimed at avoiding that the risks remain hidden for customers and banks for too long when payment deferrals are granted for an excessively long period.
- After the deferral period expires, payments resume, and the term of the loan is extended by the deferral period.
- New Charters for mortgage loan and business loan payment deferrals have been drawn up.
Financial sector continues unprecedented commitment
The coronavirus crisis continues to hit many people hard this autumn. Many companies were forced to close their doors for a second time, putting several households and businesses back in a difficult situation. Banks, therefore, want to continue supporting and financially guiding them. In this way, they get every chance to get through this turbulent period as well as possible and quickly return to a stable financial situation as soon as the coronavirus crisis is under control.
"We, as financial institutions, are taking on our societal role more than ever and are acting in solidarity. We want to support our customers who are facing extra difficulties and take our responsibility."
Together with the Federal Minister of Finance, it has therefore been decided, just like in the spring, to continue to financially support individuals and businesses when they are in or at risk of financial difficulties due to the ongoing coronavirus crisis. The financial sector once again commits to supporting individuals and businesses as best as possible and guiding them through the crisis by allowing for a general payment deferral and by extending and expanding the second state guarantee scheme for SMEs.
- For mortgage loans, capital and interest payment deferrals can be requested for credits taken out before April 1, 2020, for a period of up to three months. This request for payment deferral can be made until the end of March 2021, and can, therefore, run until June 30, 2021, at the latest. The total payment deferral obtained can be a maximum of 9 months over the entire period.
- For businesses, it is once again possible to request capital payment deferrals for a period of up to 3 months, until March 31, 2021, at the latest. Payment deferral can, therefore, not run beyond the end of March 2021. Moreover, the payment deferral can be a maximum of 9 months over the entire period. For many businesses facing financial difficulties, it is advisable to start a dialogue with their bank now to find tailor-made solutions for their specific situation.
- The measures taken to support viable businesses through the crisis are once again based on two pillars. For SMEs, the second state guarantee scheme is extended until the end of June 2021 and will be expanded for loans with a longer term, specifically up to 5 years.
Banks will not charge file or administrative fees for the payment deferral. Thus, the financial sector is committed to providing full support and assistance during these ongoing uncertain times.
Practical details of the payment deferral can be found in the new Charters for mortgage loans and business loans.
Payment deferral for individuals
Individuals who are continuously financially affected by the coronavirus crisis during this second wave and meet the eligibility criteria can once again request payment deferral for their mortgage loans.
- Payment deferral can be requested by anyone who meets the criteria, such as income loss due to illness or temporary unemployment. All conditions are included in the Charter. During this period, the borrower is granted a deferral of capital and interest payments. The interest will be settled after the deferral period.
- The financial sector also pays special attention to those most severely affected by the current crisis. Borrowers with a net monthly income of less than 1,700 euros can take payment deferrals without accruing interest on the deferred payments. Banks take care of this.
- A payment deferral for a mortgage loan can be requested for a maximum of 3 months, and the request must be made by the end of March 2021. Payment deferral can, therefore, run until June 30, 2021, at the latest. For example, an application made in December applies to the months of January, February, and March. An application in January applies to the months of February, March, and April,...
- In total, the payment deferral may not exceed 9 months, over the entire period of both Charters (from April 2020 to June 2021).
- The banks undertake not to charge the usual file or administrative fees.
- After the deferral period expires, regular payments resume. The term of the loan is extended by the period of the payment deferral.
Payment deferral for businesses
Businesses severely affected by the coronavirus crisis also have the option to request payment deferral for their business loans.
- A company can choose to request payment deferral for its business loan if it meets the criteria. There must be payment problems due to the coronavirus crisis, and the company must be considered viable. All conditions are included in the Charter.
- Payment deferral for the business loan means that the company/organization does not have to make capital repayments during the deferral period. Interest remains due.
- Payment deferral can be requested for monthly installments/maturity dates in January, February, and March and can run until March 31, 2021, at the latest.In total, the payment deferral may not exceed 9 months, over
- In total, the payment deferral may not exceed 9 months over the entire period.
- Payment deferral can only be requested for loans that were taken out before April 1, 2020.
- Banks commit not to charge the usual file or administrative fees.
- After the deferral period expires, payments resume. The term of the loan is extended by the period of the payment deferral.
Call to action: collaborate with your bank to find a tailored solution
Now As the total period of payment deferral cannot exceed 9 months, it will no longer be possible for certain households and businesses to obtain payment deferrals. It is incredibly important for them to engage in a dialogue with their bank and work together to find a tailored solution to overcome this challenging period.
Similarly, for many other businesses that have recently encountered financial difficulties but can still request payment deferrals, it is advisable to engage in discussions with their bank now. The best way to assist a business facing potential liquidity issues is to have a conversation about their specific situation and circumstances. This approach ensures that any problems are not simply postponed for a few months but are addressed collaboratively with the customer, based on a personalized and individualized approach.
For businesses, it is crucial not to wait too long and allow risks to accumulate, as this can lead to even greater problems. The longer one waits, the more challenging it becomes to find a structural solution. Therefore, working together to find a tailored solution seems to be the best approach.
To guide businesses and individuals in finding tailored solutions, Febelfin has created leaflets titled "Talk to Your Banker Before It's Too Late."
Contact
Anyone experiencing payment problems and wishing to request a payment deferral is asked to contact their bank to determine if they meet the conditions. This can be done by appointment or through the available digital channels of the bank (email, chat, mobile app, etc.) and by phone.
For those who do not meet the conditions of the Payment Deferral Charter or cannot obtain further payment deferrals but are still facing financial difficulties, we recommend contacting their banker as soon as possible. A tailored solution can always be sought for your specific situation.
Banks are making every effort to assist their customers as effectively and promptly as possible.
You can find all the details regarding payment deferrals in the Second Charter for Mortgage Loan Payment Deferrals and the Second Charter for Business Loan Payment Deferrals.
