Hungarian Bankholding: the loan repayment moratorium continues with modified conditions
Member banks of Hungarian Bankholding possess a quarter of the market
The loan repayment moratorium has been extended and will continue with the same conditions until 31 October, but after that the payment escrow will be available with modified conditions only for to those in need, according to the experts of the member banks of the Hungarian Bankholding.
The repayment moratorium will continue in its current form until 31 October, after that it will be available until 30 June 2022 with amended eligibility conditions, on a reliance basis as defined in the relevant government decree. Those who wish to take the opportunity of the deferred payment option after 1 November, will have to make a separate declaration between 1 October and 31 October 2021.
According to government decree, participation in the moratorium from 1 November 2021 is subject to a modified set of conditions.
Retail clients such as pensioners, families raising children, the unemployed, public workers, and people whose household incomes have fallen permanently, will continue to be eligible for the moratorium.
Under the regulation, companies whose net sales from their activities have decreased by at least 25% in the last 18 months preceding the application and have not entered into a soft recovery loan or a new loan agreement between 18 March 2020 and the date of the application, may also use the deferred payment option.
The extension can only be requested between 1 and 31 October 2021. Clients who do not make a declaration until 31 October 2021 will be automatically removed from the moratorium.
Banks will also charge contractual transaction interest rates and fees during the time spent in the moratorium. The settlement of the accumulated debt becomes due after the expiration of the payment deferral, together with the remaining installment, thus the total debt to be repaid also increases. After leaving the moratorium, the installment of the original contract cannot increase, so the term may be much longer than the amount of time the customer has spent in the moratorium. In the case of an interest-subsidized housing loan, it is also important to take into account that the interest subsidy provided by the state may expire before the end of the extended term, therefore the installment may also increase.
"It is advisable to restart paying the installments as soon as possible, as staying in the moratorium will have a number of negative consequences in the long run. We recommend the application for a deferred payment only to our clients who are experiencing serious financial difficulties, as the accumulated debt will have to be paid off in the post-moratorium period, which will increase the amount to be repaid and, in some cases, the monthly installment”
The clients can receive detailed information on the consequences of staying in the moratorium through the websites, telephone costumer services and branches of Budapest Bank, MKB Bank and Takarékbank.
Hungarian Bankholding Ltd.
Hungarian Bankholding Ltd. is a domestically owned financial holding company, which aims to implement the merger of Budapest Bank Zrt., MKB Bank Nyrt. and Takarék Group. The company commenced its effective operation on 15 December 2020, after MNB (acting as the central bank of Hungary) approved the merger of three credit institutions, and the shares of the key owners were transferred to the joint holding company. By transferring the in-kind contributions, the second largest banking group in Hungary has been established.
In March 2021, the Board of Directors and the Supervisory Board of the Hungarian Bankholding approved their five-year strategy for the merger of the member banks, based on which the fusion of the three credit institutions is planned to be concluded in 2023. The aim of the emerging large bank is to be the most modern bank in Hungary, which will introduce flexible, internationally leading digital solutions.The new large bank will serve the full market spectrum and all customer segments in the future, with a significant emphasis on the provision of new, modern range of products and services to retail, micro, small and medium-sized enterprise and agricultural customers.
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