Mortgage payments can be deferred

Even before the law came into force, thousands had already declared their need for help. According to the German Savings Banks and Giro Association, a good 124,000 applications for suspension of loan installments had been received by the savings banks by Monday morning. Many of the institutes had already announced at the end of last week that customers who ran out of money due to the Corona crisis could suspend interest and repayments on their private loans. The Bundestag and Bundesrat had passed a corresponding law.

The regulation has been in effect since April 1st. But even before that, it became clear that the postponement of payment is sorely needed for many. It's not just about loans. Those affected do not have to pay bills for electricity, gas, water, telephone or internet either. However, the financial relief is tied to certain conditions.

What does the deferred payment look like?

It is initially valid for a maximum of three months, from April 1st to June 30th. The loans are about privately concluded loans. This can be a construction loan as well as a car financing. The loan agreement must be signed before March 15th. Interest and repayment are then deferred, so they are postponed three months. For electricity, gas or telephone contracts, the deadline is March 8th. A deferred payment is also possible here from April to June. "But you have to make up for the payments," says Stephanie Heise, a financial expert at the North Rhine-Westphalia consumer center. In terms of electricity, gas or telephone costs, this means that additional payments will be made to those affected in the months after the postponement. In case of doubt, one should therefore consider using existing reserves to pay for such existential services, says Heise. "If you can't do that, you shouldn't hesitate to avail yourself of the deferred payment."

Who can request the postponement?

This is possible for private individuals and small businesses. Those affected have to prove that they have lost income that can be traced back to the Corona crisis and that they are therefore unable to pay their bill or installment. In addition, they have to assure that the payments are unreasonable because they endanger the "reasonable livelihood", according to the law. In the case of very small businesses, "the economic foundations of the commercial enterprise" must be jeopardized.

How do you prove the entitlement?

"The law does not say anything concrete about this," says Kay Görner, legal expert at the consumer center in Saxony. Therefore, it is ultimately up to the creditor what proof he requires. At the savings banks, for example, you can apply to suspend the loan on the Internet. In the online procedure, the customers assure that they have lost income because of the Corona crisis and that the payments are unreasonable, says the Sparkassen- und Giroverband when asked: "In addition, in some cases, proof can be requested." That could be a confirmation of short-time work by the employer. "Such a confirmation would be optimal," says Dirk Stein from the Association of German Banks (BdB). He advises those affected to approach their own bank as quickly as possible and to clarify the requirements in a conversation.

Consumer advocate Stephanie Heise also believes it makes sense to talk to the bank soon. "The more clearly you can prove that the loss of earnings is due to the Corona crisis, the sooner the question of the deferral will be resolved." This evidence and the unreasonableness of the payment should be explained in writing. The best thing to do is to send the documents to the bank by registered mail.

What applies to electricity, gas or telephone?

Consumers also have the right to temporarily suspend payments to the supplier or the telephone company. However, they have to "expressly refer to", according to the VKU association, which represents the municipal utilities. The North Rhine-Westphalia consumer center offers a sample letter for this. You should also point out your own plight due to the Corona crisis and add appropriate evidence. The energy supplier Eon says that customers who are in financial need because of the crisis should contact customer service and receive individual advice. Incidentally, "since the beginning of the Corona crisis, the blocking of affected households has been avoided as far as possible," says an Eon spokesman. According to VKU, there are currently "almost without exception no interruptions in the electricity, gas or water supply" for municipal utilities.

What happens after the three months?

After June 30th, consumers have to transfer the money to the utility again every month. They also have to settle the deferred payments. How this happens, customers should discuss with the provider in advance - but not too early, advises consumer lawyer Görner: "It makes sense to wait until you know to what extent you can meet the payments in the future." The law provides that the deadline for deferred payments can be extended by three months if the economic situation has not yet improved due to the Corona crisis. "You should then look again to talk to the provider and extend the suspension of payments if necessary," says Görner.

In the case of loan agreements, the previous interest and repayment payments are resumed after the period has expired. The credit period is extended by three months due to the deferred payment. Consumer advocates advise caution if the bank wants to make a separate agreement on further loan processing while the payment is being deferred. Then customers should check whether this does not put them in a worse position, says Kay Görner: "Unfortunately, the law does not exclude agreements to the detriment of consumers." If in doubt, you should therefore insist on the previous terms of the contract.