Loss of job falls on us most often when we need it most – e.g. when we have to pay off a large mortgage or loan. Is this a difficult situation? Certainly yes.
If we do not have large savings, then the loss of a permanent source of money can significantly impede not only repayment of installments, but even everyday life. Is this a dead end? Certainly not, all you have to do is stay calm and consistently seek settlement with the bank.
Before you take a loan
Of course, the best solution is prevention instead of treatment. Regular saving and reducing unnecessary expenses can guarantee us a smooth repayment of installments for the first few months of losing your job, but nowadays it is very difficult to save money, even if you have a good savings account .
However, we can take out unemployment insurance before taking out a loan. This option may be beneficial in extreme cases, but it also has some disadvantages and inconveniences. First of all, unemployment insurance is relatively expensive – the premium can be up to 1% of the cost of the entire loan.
Secondly, not all job loss qualifies us for insurance and you should read the General Terms and Conditions carefully to know what your exclusion list is. The most common problem is job loss due to their own fault – financial institutions tend to pay their debts only if the employer is at fault. However, it is difficult to predict the reason why we will lose our source of income.
Extending the loan period
Each borrower has the right to send an application to extend the loan period . It is an advantageous solution because it allows to extend the loan repayment, which reduces the cost of a single installment.
, it is worth remembering that in general, you pay more than originally, as the amount of interest paid to the bank increases. An additional cost is the commission, which is charged for preparing an annex to the loan agreement.
The extension of the loan period must be reasonably planned. You should find a “golden mean” between the time of extension of repayment and the real increase in costs, because sometimes a year longer can cost us several thousand zlotys. Before sending an application, carefully estimate your credit options!
The second option is to send an application for a credit vacation . It is a suspension of loan installments repayment, ranging from a few to several months.
It should be remembered that sending such an application should be ahead of the situation in which money and creditworthiness are lost – the earlier we react, the greater the probability that credit holidays will be granted to us. Banking practice also shows that the problem with obtaining credit holidays is for people who have not shown diligence in repayment of the loan so far.
The conditions for suspending the repayment of installments for a certain period of time differ depending on what conditions the bank sets. Each financial institution has its own rules for the granting and enforcement of credit holidays and often these are completely different solutions.
It is rare for a bank to suspend the entire installment, or even for a short period of time. Most often, however, credit holidays relate to repayment from one to several installments, in the period from one month to a year.