[ITEM 2] QUESTION: What are credit holidays and when do they help?

Credit holidays represent a legislatively established or bank-provided mechanism for a temporary suspension or significant reduction of monthly payments on loans and borrowings. This tool is designed specifically to support citizens who find themselves in a difficult life situation, such as the unexpected loss of a permanent source of income, a serious illness requiring expensive treatment, or a sharp reduction in wages at their current job.

The main goal of credit holidays is to give a person a temporary respite and an opportunity to stabilize their financial situation without the risk of incurring fines, penalties, and a ruined credit history due to delinquencies. During the holidays, the borrower has the legal right to temporarily skip payments altogether or pay significantly less than the established amount for a specified period, which by law can reach up to six months.

However, this temporary respite still has to be paid for, as credit holidays do not mean debt write-off or the forgiveness of accrued interest. During the grace period, the bank continues to accrue interest on the remaining principal in accordance with the agreement terms (in the case of consumer loans) or shifts the payment schedule. As a result, the total overpayment on the loan and the term for its full repayment increase, which must be taken into account when deciding to submit an application.

To exercise the right to credit holidays, the borrower must contact their financial institution and provide a comprehensive package of supporting documents. In practice, these may be a certificate of registration at the employment center, extracts from medical institutions regarding inpatient treatment, or an income certificate from a new workplace. The bank is obligated to review such an application within the periods established by law and make a decision on granting the grace period provided all criteria and loan amount limits are met.