#solution #meaningless #Important #credit #holidays
Credit holidays 2024 are getting closer. The law on this matter is awaiting the decision of President Andrzej Duda. Compared to the solutions from previous years, there will be changes in submitting applications – explains the Ministry of Finance in response to our questions. This is related to the criteria that entitle you to take advantage of installment holidays.
Loan holidays mean the suspension of mortgage repayments. Borrowers who take advantage of them will be able to postpone the repayment of four installments at no cost to the end of the repayment period (two installments between June and the end of August, the next two – from September to the end of 2024). – This is as simple a structure as possible – we hear from the Ministry of Finance.
According to the ministry’s announcement, borrowers will be able to take advantage of loan repayment holidays for the last time.
– We do not anticipate this form of support in the coming years. The Borrower Support Fund will fully take over the role of supporting those who are in a really difficult situation – said Deputy Minister of Finance Jurand Drop during a meeting of the Senate Committee on Budget and Public Finance.
Credit holidays: there are limits. And good
The decision to extend the loan holidays until 2024 is praised by Bartosz Turek, chief analyst at HREIT. – Borrowers still need support. Especially those who took out a loan when interest rates were the lowest in history, i.e. in 2020 and 2021 – he explains.
Borrowers whose loan does not exceed PLN 1.2 million and whose installment is at least 30% will be able to take advantage of the loan holidays. income calculated as the average over the last three months. The income condition does not apply to families with at least three children.
Credit holidays were introduced for the first time in 2022. The new project assumes some changes compared to the previous edition.
Proxima Studio/Shutterstock
– When the PiS government first introduced credit holidays, there was no limit on the loan amount that could be covered by the holiday – reminds Bartosz Turek. – There were no thresholds regarding what part of our earnings we spent on installments. There is no doubt that some people did not need a break from paying installments at all, because they spent the saved money on pleasures. What is more encouraging, data for 2022 show a high tendency to overpay the loan. This is undoubtedly a better solution than spending money on consumption. This does not change the fact that there was no point in providing statutory support for people who could avoid repaying installments without any problems – he adds.
What about the RdD (installment to income) ratio? The HREIT analyst believes that a loan absorbing 30 percent household income is still a relatively safe level of debt. – Above this ratio, problems arise due to the excessive burden on the household budget with loan repayment costs. We have obvious problems when we spend half or even more of our earnings on installments – explains Bartosz Turek.
The analyst draws attention to one more limitation introduced in the project. It concerns the maximum amount of debt (PLN 1.2 million). – The sense of such a limitation is best shown with an example – says Bartosz Turek. – If someone has a loan for PLN 2 million, they spend about PLN 14,000-15,000 on installments. PLN per month. With such a large installment, even with earnings of around PLN 50,000. PLN could apply for holidays.
All you need is an application. But there’s a catch
What will the procedure for granting credit holidays look like? So far it was very simple. All you had to do was submit an application – online, via online banking or in writing. We were informed by the Ministry of Finance that this would not change. However, there is a modification.
– Together with the application, the consumer will also submit a declaration regarding the fulfillment of the RdD indicator value or having at least three dependent children – we learn from the ministry. There is a risk of criminal liability for submitting a false declaration.
The bank will have 21 days to confirm acceptance of the application, but the lack of confirmation does not affect the commencement of the installment suspension period.
Credit holidays and income criteriaTVN24
However, not everything is that simple.
Let’s imagine this situation: two people have a joint loan that they repay together. However, they do not live together. In such a situation there may be, for example, a divorced couple or a father who took out a loan with his son. Can they take a vacation?
According to the information we obtained from the Ministry of Finance, this is not necessarily the case. The right to this is granted to persons “permanently residing and managing together”.
Credit holidays? Banks send a letter to the Prime Minister
The idea of extending credit holidays until 2024 was met with protests from the banking community. Industry representatives sent a letter to Prime Minister Donald Tusk, in which they pledged that in exchange for abandoning this solution, the banking sector would allocate additional funds to the Borrower Support Fund. The letter also recalled that although half of the beneficiaries of the loan holidays overpaid the loan, 20 percent spent funds on consumption.
According to the industry, this solution “perpetuates the dangerous trend initiated by the previous government of unjustified social expectations regarding the possibility of non-performance of contracts, thereby undermining confidence in the stability of law, which is the basis of safe banking, without the proper functioning of which it is impossible to finance key investments in Poland.”
However, the ministry does not intend to give in to pressure from bankers. – The banking sector submitted its comments, which were analyzed and some of them were taken into account in the project. Moreover, setting a loan value limit of PLN 1.2 million will reduce the costs of credit holidays for banks by approximately PLN 80-90 million.
According to the estimates of the Ministry of Finance, the cost of extending the credit holidays will amount to approximately PLN 2.5 billion (if a similar percentage of eligible people use them as in 2023). Meanwhile, the total cost of the current credit holidays (for 2022 and 2023) amounted to PLN 12.8 billion.
Main photo source: Grand Warszawski / Shutterstock.com
