Frequently Asked Questions – Moratorium
In these trying times, the Bankers Association of Saint Lucia is here to support you and your family. Our objective is to help you to concentrate on what is important – remaining in good health, supporting your loved ones, and of course, taking care of your finances. Our Association members are offering our valued customers, moratoriums on bank debts in an attempt to cushion the economic blow dealt by the COVID-19 Pandemic. To assist with your concerns on moratoria we have prepared a list of answers for some frequently asked questions.
Frequently Asked Questions (FAQs): COVID-19 Support Programme
1. Question: What is a Moratorium?
Answer: A moratorium refers to the period of time during which you do not have to pay the instalment on your loan. The moratorium is being offered as part of a support programme to help individuals who are facing temporary financial difficulties as a result of loss of income or reduced income due to the COVID-19 Pandemic.
2. Question: Is the offer automatic or do clients have to request the offer?
Answer: In the majority of Financial Institutions, the moratorium is not automatic, clients who are impacted by loss of income or reduced income will need to opt–in by contacting their bank to avail of the moratorium. However, there are some institutions that applied an automatic moratorium and requested that their clients opt-out as opposed to opting in.
3. Question: Are all Banks in Saint Lucia providing the moratorium?
Answer: YES. All Banks and other Licensed Financial Services Institutions are providing support via the moratorium.
4. Question: Which Banking facilities are eligible for the moratorium?
Answer: Personal and business Loan, Mortgages, Credit cards, overdrafts, lines of credit.
5. Question: If I avail myself of the moratorium, what is the period covered?
Answer: The moratorium options vary across organizations ranging from 3 months up to 6 months.
6. Question: Will I be charged penalty fees for availing of the moratorium?
Answer: NO. All penalty fees will be waived for the facility on which the moratorium is granted during the moratorium period.
7. Question: Can I select which facilities I want the moratorium to be applied to or must it be applied to all of my loan facilities?
Answer: YES. Clients will decide if they wish the moratorium to apply to all of their credit facilities or if they want it to apply to specific facilities.
8. Question: My loan is already in arrears, can I still qualify for the Moratorium?
Answer: The amount or the level of arrears is a determining factor, so you will need to contact the receivables unit of your Financial Institution to ascertain how they can assist.
9. Question. If I avail myself of the moratorium, will the bank charge interest during the moratorium period?
Answer: YES. Interest continues to accrue during the moratorium period.
10. Why does the bank charge interest during the moratorium period?
Answer: The objective of the moratorium is to provide cash flow relief to customers but interest must be paid to allow the banks to meet its obligations to its depositors and cover its operational expenses while remaining stable to protect depositors’ funds.
11. Question: Should I avail myself of the moratorium if I am not impacted financially?
Answer: If you are not impacted financially it is advisable that you continue to pay your loan as arranged with your financial institution.
12. Question: What options are available for the moratorium?
Answer: You have three options (a) to pay interest only (b) to pay a reduced payment i.e. – what you can afford or (c) to pay nothing during the moratorium period.
13. Question: Is there a monetary limit to what payments I can postpone if I take up the offer?
Answer: There is no monetary limit assigned to the offer at this time.
14. Will my monthly payment increase after the moratorium?
Answer: This will depend on the option selected when (a) you applied for the moratorium or (b) when the loan is being restructured after the moratorium expires. There will be no impact on the monthly instalment for clients who select paying the interest on their loans during the moratorium period but the term of the loan will increase by the duration of the moratorium. Clients who request the moratorium on both principal and interest will have an increased monthly payment because the interest accrued will be added to the balance of the loan to allow for calculation of the new instalment.
15. Will the maturity date of my loan be impacted by the Moratorium?
Answer: The maturity date will change by the same amount of time requested for the moratorium.
16. If my car or home insurance premium falls due and I have already applied for a moratorium and I cannot pay the premium what should I do?
Answer: Contact your insurance company to ascertain if they have a support programme in place to assist. If they are unable to assist then contact your bankers to ascertain how they can assist.
17. Can I revert to my original maturity date when my finances improve?
Answer: YES. If your finances improve and you would like to revert to your original maturity date then your Bank will accommodate your request, but it will require an increase in your monthly instalment.
We expect there to be more questions and encourage you to contact your Bank to discuss any concerns which we may not have covered in this FAQ. We thank you for your business and ask that you continue to observe the COVID-19 health and safety protocols.