Board chairman of the Estonian Banking Association Erki Kilu said in a statement: "Also the Financial Supervision Authority this week adopted recommendatory guidelines concerning common rules for grace periods. We took these guidelines into consideration in our final agreement."

The regulation concerning grace periods deals with the suspension of the payback of the principal of a loan through changes to the loan repayment schedule. On the basis of an application from the customer, also the time period for the repayment of a loan will be extended by the length of the grace period. At the banks which have acceded to the agreement on the grace period only the loan repayment schedule will be changed in the loan agreement, with the rest of the terms left unchanged.  

Guarantees of the loan underwriting programs of the state received via Kredex or the Rural Development Foundation can be added to the loan agreements. 

Grace periods can be applied to corporate loans, mortgage loans, leases, as well as consumer credit agreements. The length of the grace period is up to 12 months for mortgage loans and up to six months for leases and consumer loans.

Companies and groups of companies that have a credit line of no more than five million euros in total in one bank can get a grace period for the principal of their loans for up to six months. Contracts of operating lease are not covered by the agreement, but they can be converted into financial lease agreements if requested. 

The arrangement for the grant of grace periods is valid for loan agreements concluded before March 12, and based on it applications for grace periods can be filed until June 30. The rules apply to clients who did not have problems with the repayment of their loan prior to the implementation of the regulation concerning grace periods. To get a grace period, a person must approach their bank. 

The Estonian Banking Association recommends that borrowers definitely turn to their client manager or the bank's customer service before defaulting on payments in order to find a solution for the prevention of problems as quickly as possible.

The common regulations for the grant of grace periods arising from the emergency situation will step into force on April 27 and they will be published on the web page of the Estonian Banking Association. 

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