What is deferred payment - in simple words?

Under what circumstances is a deferment granted?

You can rely on deferred payment if the following circumstances arise:

If you lose a permanent source of income. It is important for the lender to indicate the reason for leaving a job (for example, layoff). The main thing is that the borrower’s fault is not recorded.
A disease that requires long-term treatment and large financial costs.
Loss of a breadwinner, if the borrower is supported by him.
Due to a change of permanent residence.
Loss of residence as a result of natural disasters.
Due to going on maternity leave.

There are a number of circumstances when a bank is ready to provide its clients with a deferment on payments.
Each banking organization checks the borrower’s CI and determines its reliability. If the client previously complied with and properly fulfilled his loan obligations, the most advantageous offers can be developed for him.

Types of deferments

Deferment of payment is a procedure for freezing payments on an existing loan, or reducing the monthly payment with a subsequent extension of the payment period. There are several types of deferment:

Changing the duration of the contract with subsequent extension.
Adjustment of the current terms of the loan agreement, restructuring.
Changing individual items in the current lending program on more favorable terms - refinancing.

The general term “deferment” hides several types of services.
If a client has temporary difficulties with repaying a loan, the most popular method of resolving the situation is deferment of payment. If payments are completely temporarily suspended, the client will have time to find a new job or another solution to financial difficulties.

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Changing repayment terms

The main goal of the program is to provide a deferment in payment of the main body of the loan. The client may not pay the principal amount, but the interest rate continues to apply. As a result, the total cost of the loan will automatically increase. As a rule, the bank agrees to provide a deferment for up to six months.

There are several types of loan repayment holidays:

exemption from payment of the principal amount of the debt;
suspension of interest accrual;
complete exemption from payments for a certain period.

You need to know what options exist in order to know what to talk about with a banking specialist.
The third method is the least common, since it is not beneficial for the banking structure.

List of banks providing credit holidays

Providing credit holidays is a fairly new service offered to its clients by financial institutions. However, it is gaining popularity day by day, as it is beneficial to both parties. By easing the credit burden, the borrower has the opportunity to restore his financial status and pay off his debt obligations to the lender. The bank avoids losses resulting from non-repayment of funds and problems associated with their collection from the debtor.

For this reason, the list of institutions providing this service includes large financial market participants with a high status and strong reputation:

Sberbank provides holidays only to borrowers who do not violate the payment schedule;
VTB24 allows only partial deferment of loan payments;
Promsvyazbank practices deferred payment for a maximum of 2 months;
“Orient Express” allows its clients to receive credit holidays for a period of 1 to 3 months;
Alfa-Bank allows you to defer part of your contributions for no more than 12 months;
“Home Credit” makes it possible to receive a partial deferment for 6 months;
Trust Bank provides a credit holiday service on a paid basis.

Loan repayment: information for borrowers

Of course, deferred payments are not a panacea for a borrower when a difficult financial situation arises. Sometimes credit holidays can even aggravate the already difficult situation of the debtor.

In the case of a secured loan, it is better for its owner to immediately attend to the sale of the property under the encumbrance if the financial situation is not expected to improve in the near future. Having received a deferment, after which he will not be able to resume payments to the bank, the debtor will only worsen his situation. And bringing the situation to court will add fines and legal costs to the amount of debt, which will significantly increase the size of the obligation.

In addition, the use of holidays increases the total overpayment on the loan due to interest accrued for the entire period. However, in case of temporary difficulties, deferment of payment will allow the borrower to stabilize the financial situation without damaging their reputation.

To do this, you need to very carefully analyze the conditions offered by the bank and assess your financial viability for the near future.

Payment restructuring

If the borrower's financial situation worsens, restructuring is another way to resolve the situation. To do this, the client must submit a written application to the organization’s branch with a request to change the current conditions for loan repayment, indicating objective reasons.

If the creditor agrees to provide a restructuring, he must announce new terms of the agreement followed by re-issuance of the loan agreement. As a rule, changes relate to the amount of the monthly payment in the direction of reduction and prolongation of the contract. As a result, the borrower's financial burden will be reduced, but the loan repayment period will be increased.

Refinancing program

Most lenders use this program to increase their customer base. The main goal is refinancing on more favorable terms for the borrower. When concluding a new agreement, you can receive the following benefits:

prolongation of the current loan agreement;
reduction in interest rates;
reduction in the amount of payment per month.

The bank independently decides what advantage to give to the client. For regular borrowers who properly fulfill their obligations, individual, more advantageous offers can be developed.

A new agreement is mandatory, where the bank undertakes to repay the existing loan from another organization, and the client will have to repay the loan from the new institution.

The bank independently decides what advantage to give to the client. But the borrower must also understand what a specific offer means for him

Regardless of the type of deferment, the borrower must contact the bank in advance with an explanation of the current situation. If the agreement does not contain a clause on the provision of credit holidays or deferred payment, this means that the bank will consider this issue individually in each case.

When signing a new agreement, from the next month the borrower must comply with the terms of the new agreement. The deferment will help maintain a positive credit rating and qualify for favorable offers on new bank loans in the future.

about the author

Evgeniy Nikitin Higher education majoring in Journalism at Lobachevsky University. For more than 4 years he worked with individuals at NBD Bank and Volga-Credit. Has experience working in newspapers and television in Nizhny Novgorod. She is an analyst of banking products and services. Professional journalist and copywriter in the financial environment [email protected]

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Legislative framework for 2021

Deferred payment under a supply agreement in any of its interpretations is regulated by the Civil Code of the Russian Federation, but initially it is necessary to study its main articles, which contain the rules for the delivery itself.

The main articles used in this case are:

Art. 506 – indicating the rules for forming an agreement on the provision of products by the supplier;
Art. 507 – regulation of disagreements;
Art. 507-510 – define delivery issues and its rules;
Art. 511 and 512 – replenishment of shortages during transportation of products;
Art. 513-515 – reception and storage of goods, as well as their selection;
Art. 516 – option of settlement with the counterparty.

Options for payment itself, installments, as well as lending are described in Art. 485-491 Civil Code of the Russian Federation.

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Author of the article Evgeny Nikitin

Consultant, author Popovich Anna

Financial author Olga Pikhotskaya