Luminor joins the bank moratorium | Luminor

Until 30 June, there will be a possibility to apply for deferred payments of the loan principal or so-called payment holidays

Luminor joins the moratorium developed by the Finance Latvia Association providing for the possibility to defer payments of mortgage principal for up to 12 months, while payments of leasing or consumer loan principal for up to six months for those bank customers who are experiencing short-term financial difficulties caused by COVID‑19. In accordance with this moratorium, both individuals who have already been granted payment holidays and those who still require them will be able to apply for a one-time deferral of payments before 30 June.

“Responding to the situation in the state, already since the beginning of the emergency situation we have actively offered solutions and reach out to customers, providing a possibility to defer payments of loan principal, so that customers could successfully get through this difficult time. Therefore, we support the moratorium initiated and developed by members of the Finance Latvia Association, among whom is also our bank, so that customers all around Latvia could receive equal and as efficient support as possible – we extend the maximum period for deferral of payments of loan principal up to 12 months for mortgage payments and up to 6 months for leasing and consumer loan payments,” states Kerli Gabrilovica, Head of Luminor Latvia.

Important to know:

Customers of Luminor can apply for payment holidays in the internet bank, indicating the reason for deferral of fulfilment of liabilities, caused due to the impact of Covid-19. A customer can also select a shorter term for deferral of loan principal payments than specified in the moratorium, carefully and objectively considering own financial capabilities and the possible development of the situation.

If a customer has already requested granting of payment holidays in the period from 14 March to 27 April 2020, according to the principles of the moratorium the customer can repeatedly apply for extension of the term for deferral of loan principal payments.

The moratorium provides that a customer will have a possibility to receive deferral of loan principal payments, if the customer has no significant payment delays in the last 12 months before 12 March 2020 and is not recognised as insolvent before the aforesaid date or in the period of deferral of loan principal payments, and if the customer during this period continues to pay loan interest and/or other payments specified in the loan agreement.

Deferral of loan principal payments means that only loan interest will have to be paid during the respective period, whereas the loan principal payments will be paid later during the existing loan period. The borrower shall take into consideration that in the case of deferral of loan principal payments the future loan principal payments will increase after expiration of the deferral period.

For the monthly payment amount to remain the same as previously, there is a possibility to extend the loan term; however, in this case the borrower shall consider that the total amount of interest paid within the framework of the loan agreement will increase. Therefore, when reviewing an application for payment holidays, the most suitable solution for the situation of the customer shall be considered.

The customers who do not meet the conditions of the moratorium and who have got into financial difficulties, as a result of which they are unable to fulfil their liabilities, still can apply for payment holidays. We understand that in the existing situation there may occur difficulties with making loan payments; therefore, we are ready to reach out and individually examine each separate case in order to help overcoming this emergency time.

The moratorium is coordinated with the Financial and Capital Market Commission, and today it was also approved by the Competition Council after consulting with the European Commission. The moratorium comes into effect on 29 April 2020.

The moratorium is developed in accordance with guidelines of the European Banking Authority. Similar moratoriums have been signed also in Lithuania and Estonia.

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