Loan Payment Holidays
A loan repayment holiday (also known as a loan repayment break) is a period of time - normally at the
beginning of the loan term - where the lender allows the
borrower to avoid loan payments. It's a feature that many lenders offer to provide flexibility to their customers. Of
course, not everybody decides that they need to take a payment holiday. However, many borrowers do choose to take
advantage of the option.
Why Get A Loan With A Repayment Holiday?
The main advantage is flexibility. You can take out the loan, and you'll not need to make any repayments for
five months after receiving the loan cheque. This can be a great advantage, especially in financially difficult
times of the year - Christmas can be particularly bad for many people. For example, if you received your loan
cheque on the 1st of November, you would have the Christmas Holiday and the New Year without having to pay any
money back. In fact, your first loan repayment wouldn't be until the 1st April the following year.
What Are The Downsides of Loan Payment Holidays?
There are a couple of disadvantages to taking up a payment holiday. The interest on the loan is counted from the day the
loan completes (i.e. when the cheque is sent to you). This means that the total amount you owe will increase slightly
between the completion date (1st of November in the example above) and the date of your first loan repayment. So you'll
be paying slightly more over the length of the loan term.
Secondly you'll be paying the loan off for slightly longer - your last payment will be five months later than it otherwise
would have been.
On What Types of Loan Can You Get A Payment Holiday?
You can normally take payment breaks on secured loans
(i.e. a loan that is secured against your home,
provided that you already have a mortgage). Repayment holidays on other types of loan, such as
unsecured loans or payday loans
are much rarer, although not impossible to find. When you
apply for a loan decision through us, a specialist lender will contact you shortly afterwards. Speak with them to see if
you are eligible for a loan repayment holiday.
How Long Do The Repayment Breaks Last?
The exact length varies from lender to lender. With the loans that our partner companies provide, you could be eligible to
pay nothing for 5 months. This is a typical length of time in the loan industry, although its possible that you're able
to take longer, or take more than one payment holiday across the term of the loan.
Nothing to Pay for 5 Months
If you're looking for homeowner loans,
you may be eligible to take a five month payment holiday at the beginning of
your loan term. Effectively you'll be able to pay nothing for 5 months.
In order to find out whether you're eligible, apply for your no-obligation loan decision today.
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