Coronavirus and Loans: Take a Vacation From Loan Repayment

Moratorium

If you took a house loan or leased a car, for example, you will be happy to know that on March 17, 2020, the National Bank of Serbia adopted two Decisions on this matter: the Decision on Temporary Measures for Preserving Financial System Stability and the Decision on Temporary Measures for Lessors Aimed at Preserving Financial System Stability. They both impose a moratorium on loan (re)payments for at least 90 days.

Everyone can use the moratorium – companies, entrepreneurs and citizens – for home loans, consumer and cash loans, credit cards and current account loans.

Banks and lessors are obligated to offer a moratorium on loan repayments to their clients by posting a notice of such an offer on their websites until March 21, 2020. Clients can accept or decline such an offer in the next 10 days (March 31, at the latest, depending on the day the bank posted the notice). If they choose neither, it will be considered that the offer was accepted on the 10th day. The moratorium is effective after the ten-day period expires. No additional expenses will be charged to clients.

Here are some of the answers to the most frequently asked questions!

How Does the Moratorium Work?

After the expiry of 90 days, you are going to start paying the installments regularly and your repayment period will be extended by three months. That means that if the repayment period was supposed to end in June 2021, it will now end in September 2021. If you find a more convenient method of repaying the loans, the bank should meet you halfway. For example, you can choose to repay the installments (contractual interest rate included) all at once after the moratorium ends.

Will My Installments Increase After 90 Days?

Yes. The bank still has the right to charge the contractual interest during those 90 days so the contractual interest will be distributed evenly to the remaining loan and your installments will increase accordingly.

However, if you want to, you can choose to pay the contractual interest all at once after the moratorium ends. That way your installments will remain the same.

Note that the bank does not have the right to charge interest to late payments.

Do I Have to Accept the Offer?

No, you don’t. You can decide to continue with your usual repayment method and not use the moratorium. However, note this – we advise you against declining the offer. The best option is to simply continue repaying your loan the usual way, without submitting any notification to the bank. The reason is simple – in case you change your mind, the moratorium will still apply to you. If you decline such an offer, you won’t be able to take it back, which means you won’t be able to use the moratorium.

Am I Requires to Pay the Installment Due for Payment By The Day The Moratorium Came Into Force?

No, you don’t have to, but you will need to notify the bank of that. For example, if your installment is due on March 25, you will need to notify the bank that you want the moratorium period to be in effect from the day the bank posted the offer for the moratorium. If you don’t do so, the moratorium will be in effect after the ten-day period expires.

Also note that if your installment is due on the day before the bank posted an offer (for example, the bank posted an offer on March 20, and your installment is due on March 19), you are obligated to pay that installment.

What If I Have Multiple Loans, Does the Moratorium Apply To All Of Them?

Yes, the moratorium applies to all of them.

*All of the above applies to lessors as well.

Internationally, countries have adopted similar measures.

All this illustrates that the governments of different countries are trying to fight the strong impacts of the COVID-19 outbreak, especially in the area of economy and financial stability.

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