The new government regulation No 62/2020 entered into force on March 25, 2020. The package includes rules about the details of the payment moratorium, the preferential unsecured loans and modified the scope of the payment moratorium.
The amount of interest and fees incurred during the payment moratorium cannot be capitalized. The interest and fees incur during the payment moratorium shall be paid on an equal annual basis after the moratorium with the remaining installments. After the payment moratorium has expired, the maturity will be extended so that the sum of the installment due and the instalment due to the interest and fees incurred during the payment moratorium shall not exceed the amount of the installments under the original contract (i.e. the final maturity of the loan is increased by more than the payment moratorium length).
According to the decree if the deadline for limiting the maximum annual percentage rate (APR) on unsecured loans (currently 31 December 2020) is not extended, from 1 January 2021 the APR of that lender at the time of the conclusion of the contract will prevail.
There are many tasks involved in a payment moratorium, from immediate tasks to deeper analysis. Among other things, the clients should be properly informed about the new rules so that they can decide whether they want to pay their outstanding debt. It is also recommended that the relevant institutions analyze how to predict the possibility of default of individual debtors in the post-payment moratorium and assess how credit risk can be mitigated most effectively.
