The state of alarm created by the pandemic is causing many people as self-employed or SMEs, people affected or people who telecommute part-time to see their income reduced or even completely abolished. In this complicated financial situation, having to pay the monthly installments of a loan can become an arduous or almost impossible task. To avoid the repayment of a loan becoming a problem, there is an alternative to reduce or eliminate the loan installments without incurring a default : the lack.
What is a lack of a loan?
A deficiency consists in failing to pay for one or several months all or part of the monthly installment agreed with the entity. This allows us to ease the financial burden we have during the months in which our income has been reduced. There are two types of deficiency:
- Total lack : it consists of deferring the full payment of the monthly installments, both the principal and the interest, which will allow us not to pay anything for the duration of the grace period.
- Partial lack: it consists of not only paying the capital to be returned, that is, the fee would only consist of repaying the interest.
How do I apply for a consumer credit deficiency?
There is no predetermined process by which to apply for a grace period from the bank. It is a negotiation with the bank to change the contract and to allow us this alternative
Currently, although the bank branches are still open to the public, it is best to contact our manager via telematic means (online and telephone) and go to the branch only if the signing of the new contract can only be done in person.
It is important to make an estimate of how long we believe that this situation of financial imbalance caused by the coronavirus will last in order to choose the months during which we will apply this alternative.
If we anticipate that we may fall into default, it is important to contact the entity to explain our situation and find a solution before not paying.
How much does it cost to defer payments on a personal loan?
There are two types of expenses that the grace period may entail.
- The cost of changing the contract. Although not all entities will charge this commission, it may be that we have to pay a percentage to fill the gap.
- The cost of lack. Making a total or partial grace implies delaying payments and extending the repayment period, which will generate interest for a longer time.
- To find out how much more the grace will cost us, we must subtract the total cost of the grace loan minus the total cost of credit before the grace period. The difference will be the cost of the lack.
And if they do not grant me the deficiency, what other alternatives do I have?
Banks are not required to perform a grace period. Therefore, if our negotiations do not work, another alternative to which we can is to request an extension of the deadline. By lengthening the time during which we can repay the loan, the monthly payment will be lower. However, we must bear in mind that a longer repayment time also implies that interest be generated for a longer time.