Banks declare unified moratorium on postponement of loans for citizens

The members of the Association of Lithuanian Banks (LBA), in an effort to contribute to helping citizens suffering from COVID-19, have signed a moratorium on the temporary postponement of credit commitments for private clients. This moratorium is a commitment to allow private clients, without changing the terms and interest rates of their contract, to postpone their home loan repayment for up to one year and leasing and consumer credit – up to half a year.

“COVID-19 has forced numerous businesses to come to a halt and stripped many people of their incomes. We understand that everyone, who has been impacted by the losses caused by the epidemic, needs rapid solutions and time to reorient and stabilise their finances. In this situation, credit institutions can urgently postpone the repayment of loans. After evaluating our capacities, the country’s financial institutions have decided that they can, without breaching financial stability requirements, assist private clients for up to a year. We hope that during this period, people will be able to get back on their feet and return to the usual loan repayment schedule,” LBA president Mantas Zalatorius emphasised.

All private individuals, who were making timely repayments prior to the quarantine, however face financial difficulties due to the coronavirus situation, have lost their jobs or part of their income, can, after informing their bank in writing, have the repayment of the main part of their home loan postponed for up to 12 months. For consumer credit and leasing, credit institutions will apply postponements for up to half a year during the moratorium period. During the postponement period, the client will only have to pay interest and other periodical payments.

Individual decisions will only be made regarding clients, who had significant and extended duration financial problems, overdue payments or insolvency already prior to March 16, 2020.

The moratorium was signed by the Lithuanian branch of Danske Bank A/S, the Lithuanian Central Credit Union (LCKU) and its financial group, the Lithuanian branch of Luminor Bank AS, UAB Medicinos Bankas, AB SEB Bankas, Swedbank AB, AB Šiaulių Bankas. The Bank of Lithuania approved of the moratorium.

This moratorium is open, all Lithuanian credit market participants, who offer real estate-related credit, consumer loans and leasing services to private individuals, can join it under its conditions. The moratorium comes into power on April 20, 2020 and will remain in power until July 1, 2020.

You can review the moratorium’s text on our website here.