Belarusians Allowed to Request Loan Deferrals. The National Bank Explained Who is Eligible and for How Long
Belarusians who have taken out loans but encountered serious difficulties have gained a new opportunity - a financial “safety net.” Banks and microfinance organizations are now legally obligated to provide loan deferrals.
According to the new law «On Consumer Credit and Consumer Microcredit,» which came into force on November 22, the right to a deferral arises upon the occurrence of clearly defined circumstances. Ilona Lednitskaya, Deputy Chairman of the Board of the National Bank, listed these situations, which include:
- Loss of employment;
- Death of a spouse;
- An increase in the number of dependents in the family;
- The borrower being recognized as disabled;
- Temporary incapacity for work lasting more than 40 days.
«These are situations that, unfortunately, catch citizens off guard and are impossible to foresee,» clarified Lednitskaya. Furthermore, financial institutions have the right to independently expand this list by adding other difficult life circumstances.
How to Get a Loan Deferral
To obtain a deferral, Belarusians need to submit an application to their bank or MFO (microfinance organization). After that, the organization that issued the loan is obligated to provide a one-time deferral or installment plan, while extending the term of the credit agreement. Naturally, this will happen only if the situation described in the application falls under the legal list.
Moreover, the processing of the document package in such cases will be completely free of charge for the borrower. Meanwhile, the minimum legal period for which one can «take a break» from payments is no more than three months. However, the specific duration of this period can be longer—it all depends on the circumstances and the policy of the lending institution itself.
What is a Loan Deferral?
It is not a debt forgiveness, but only a temporary suspension of mandatory payments or their reduction for an agreed period. Interest during this time, as a rule, continues to accrue, so the total amount of the loan overpayment may ultimately increase.
«But it is important to emphasize that this is only a deferral of obligations, it is not a forgiveness of debt,» warned Ilona Lednitskaya.