Banks freeze repayments on personal credit loans for 12 months

Portugal’s banks have agreed to a 12 month capital repayment freeze for loans up to €75,000.

As in the case for mortgages, the new measure also counts for immigrants overseas. “The Association of Portuguese Banks on Tuesday approved the final text for two private moratoria for single persons, residents or non-residents in Portugal, with one of them being relative to non-mortgaged credit (i.e., personal or cars), for a 12 month period, and, the other relative to mortgages (including the various types of home loans), until 30 September 2020”.
“The measure covers personal loans not exceeding €75,000 with the exclusion of credit cards,” states the document from the APB led by Fernando Faria de Oliveira.
In both cases, personal and home loans, made available by the banks and which complement those provided by the Government on 26 March, bank customers can suspend loan repayments but the period is longer for personal credit: 12 months “counting from the date that the customer signs the contract for the moratorium, compared to six months for mortgages repayments.
Access to the repayment freezes is valid for requests made since 18 March this year providing that on this occasion loan repayments are not in arrears or default for more than 90 days with the lending institution. Applications for loan freezes must be made by 30 June.
It also goes for individuals who have suffered from “a temporary reduction in income by more than 20% in the respective income because of the current pandemic.”
For mortgages and personal loans, customers can opt for a suspension on interest payments, these, however, will be capitalised. In other words, added to the outstanding debt.