The term “credit holidays” usually refers to the period of time during which the borrower may reduce or terminate his interest payments on a long-term loan subject to prior agreement with his credit institution. Most of the Latvian credit institutions have two types of credit holidays, which are Full and Incomplete:
Incomplete credit vacation is a period of time during which the borrower may not pay the principal amount of the debt in the case of a long-term loan in agreement with a bank or non-bank creditor. In order to get this opportunity, you usually have to write an application to the credit institution about the situation you are in and why you need such a holiday, and what you will do during it to increase your solvency after it expires. When you are on an incomplete credit vacation, you are not fully exempted from debt repayment and you have to pay the monthly interest payments to the credit institution, but you can reduce the total amount of repayment without repaying the principal.
A full credit vacation is a period of time in which you are fully exempted from repayment for one or more months, but it is very difficult to get such services, and there must be good reason to be able to negotiate with the bank to obtain such benefits.
Usually, after the credit holidays, monthly payments are slightly increased because you have to repay the loan in the same period because it is not refinanced, which means that the amount you did not pay during the credit holiday will still have to be repaid and it will be still in the months following this holiday the harder it is.
Credit holidays can be obtained in a wide variety of cases, but the most popular reasons are loss of work , waiting for a child , or an accident . If you find yourself in one of these situations, then you definitely need to go to the credit institution for advice , telling your situation and try to find a solution.
There is also a credit vacation for quick loans , the so-called extension fee, which allows you to pay a certain amount of money to extend your money back for 7, 14 or 30 days, during which you would need to find or earn money to be returned to the credit institution.