Many banks even advertise that they allow their borrowers to suspend installment payments once or twice a year. The only condition for the suspension of payment is that in advance at least three installments were paid punctually. Either this option is an integral part of the loan agreement or this agreement is made at the individual request of the customer.
If the lending conditions do not provide for a suspension of payment, the borrowers are always dependent on the goodwill of the bank concerned.
Why a payment suspension can be important
With the possibility of suspension of payment, unexpected bottlenecks can be bridged.
So it makes sense to suspend with the installment payments, if unforeseen expenses or even unexpected unemployment or long illness lead to the fact that the rates from the credit can not be served. Instead of simply settling the payment or to let direct debits burst, it is recommended to contact the bank. If borrowers are cooperative and point to difficulties in paying installments, lenders are happy to seek solutions together with the client. If it’s a short-term financial bottleneck, one, two or three-month hold is the best approach. If the bank makes such a request, the borrower pays no installments in the agreed time. The missing installments will be paid at the end of the term, so that the contract period will be extended accordingly. As a rule, banks charge fees and interest for the deferral.
Pay the installments
A suspension of payment does not mean that the bank waives the missing installments. The installments will be paid later and the default interest will also be charged to the customer. An alternative, which can also be arranged for a fee, would be the recalculation of the installments, which would then be slightly higher in the future.
Withdrawals today are the rule rather than the exception. Many consumers take credit commitments and plan in advance when they use the payment pauses. Often it is suspended during the summer months when the holiday season is over and money is scarce.
Suspension of payment by mail order
In the mail order business is popularly advertised that customers can buy their goods on installments and start paying the installments in six months. That too is a form of suspension. However, consumers should keep in mind that a suspension is not a gift and must be paid with interest, which makes the loan more expensive in the end.
Suspension of payment in the context of mortgage lending
A suspension of payment, which is common in real estate loans and mortgages, is not offered for classic installment loans. This is a completely different calculation system, based on the fact that the installments payable consist of an interest and a repayment installment. If then a suspension of payment comes to fruition, the borrower pays only the interest. The loan amount remains the same and must be paid in one amount at the end of the term. However, because hardly any customer can raise the amount on the order of magnitude, a new credit agreement will be signed, with which this amount will then be financed.
As with the desired payment suspension should be proceeded
Consumers, in particular, who find that they have taken on something with their payment obligations, often do not know how to help themselves. It is wrong to simply not pay the installments and to ignore the resulting reminders. The mountain of debt would only continue to grow.
First, it is important to contact the lender and look for solutions. The suspension of payment is a common variant, but only brings something that is foreseeable that the rates can be paid thereafter. If this is not the case, debt rescheduling can also be a sensible way or debt counseling. Here are the experts who help consumers bring order to their financial affairs.