Is it worth taking a vacation from a mortgage?
Do you dream of a holiday? You can’t afford it because the ghost of mortgage repayment hangs above your head? Therefore, we suggest how to take a vacation not only from work, but also from credit. When we take out a mortgage, we cannot predict the future – financially more difficult periods in our lives, in which loan installments become too much of a burden on our home budget. Banks, meeting the needs of customers, have prepared a solution to this situation.
Go on vacation
Many banks have the possibility of temporarily suspending the repayment of mortgage installments, the so-called credit holidays. A loan grace period is a very common tool, which is included in the loan agreement or regulations and is not charged with any additional costs. To use it, you only need to submit an application in which we must also notify the bank of the appropriate payment date. Each bank determines individually by when we must submit the application by the latest before we can take advantage of this privilege.
The length of the loan holiday and the frequency depend on the bank
Most often, banks allow a grace period to pay only one installment, although there are also those in which we obtain consent for half a year, e.g. in Jenny Credit SA they understand that a longer rest allows faster return to financial stability and solve more problems. In some banks, we can take advantage of credit holidays once a year, while in others only once or twice in the entire loan period.
Is it worth it?
When our credit holidays are over, we must remember that it’s time to pay back the arrears. Unfortunately, the payment grace period is only the suspension of this payment, not a total avoidance. In many banks, the borrower is exempted from paying the principal part of the installment, but he still has to pay interest. Only a few banks allow the possibility of total suspension of repayment – both capital and interest.
If you take credit holidays, the unpaid amount will be added to your debt balance. Therefore, in order not to increase the amount of the installment, some banks simply offer to extend the loan period by the period in which we took a vacation. In some, however, unpaid installments will be divided and added to the next installments – in the following months we will pay larger installments.