LHV Pank simplifies the application procedure for the grace period

1. April 2020

Given the current economic standstill, a large number of loan clients have been requesting a grace period from banks. LHV Pank enables their clients to have a free grace period under a simplified procedure without changing other terms and conditions.

LHV Pank offers a grace period to private home loans, leases and consumer finance agreements as well as to corporate loans and leases in the event of temporary solvency problems caused by the crisis. A grace period is provided to all loan clients, who suffer from the crisis.

“By today, nearly one thousand clients have contacted us with a request for a grace period. We do not consider what is currently happening in the economy to be an ordinary economic recession. Economic stagnation and uncertainty are universal and do not concern just Estonia. The income of companies as well as people has declined dramatically. This is an emergency situation in every respect and accordingly, we are enabling a grace period for all those who want it and are suffering due to the crisis,” Erki Kilu, Chairman of the Management Board of LHV Pank said.

The process of applying for a grace period at LHV Pank has been notably simplified for private clients and small and medium-sized enterprises. It is most convenient to submit the application for a grace period electronically on the homepage of LHV. LHV Pank will formalise the changes in the payment schedule without amending other conditions of the agreement and no service fee is charged for the changes.

Grace periods can also be applied for bigger corporate loans and leases. For these, LHV Pank will take a client-based approach and will find the best solution for every client. If necessary, the bank can apply extraordinary guarantees offered by KredEx to companies.

“To ensure faster recovery later, we need to save as many companies and jobs as possible. The guarantees, offered by KredEx, simplify access to the funding for companies, i.e. significantly alleviate the conditions of loans and grace periods; however, in order for the measures to achieve their full effect, the volume of the grant programme must be increased as soon as possible,” Kilu said.

A grace period can be applied for up to six months, and for home loans, up to 12 months. The grace period offered to LHV Pank loan clients applies to the principal part of the loan. This means that the clients need to continue making the interest payments. At the same time, for example in the event of total loss of income, clients may also exceptionally apply for changes in interest payments.

It is important that the application for the grace period reaches the bank before any arrears occur. Also, it should be noted that a grace period means the postponement of and not withdrawal from obligations, meaning that the amount of postponed payments will be allocated over the remaining loan period. Upon need, it is possible to postpone the maturity of the loan agreement.

LHV Group is a domestic financial group and capital provider in Estonia. LHV Group's key subsidiaries are LHV Pank and LHV Varahaldus. LHV employs over 450 people. LHV’s banking services are used by 212,000 clients, and pension funds managed by LHV have 177,000 active clients.

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