We understand that customers may experience short term repayment difficulties with their Term Loans as a result of COVID-19. Find out all you need to know about a Term Loan Payment Break during COVID-19 through our dedicated FAQ. 

Term Loan Payment Break FAQ

What is a COVID-19 Term Loan Payment Break?

A COVID-19 Term Loan Payment Break is a temporary arrangement specifically set up for customers financially impacted by the COVID-19 crisis. It is a facility where you can apply for a full Payment Break, where you make no payment during the agreed period on your Term Loan (of up to three months).

It is important to note that the term of loan (i.e. the length of time remaining on the loan) will remain the same*. This means that at the end of the Payment Break your Term Loan repayments will be adjusted to ensure that the Term Loan is repaid within its original term.

* Please Note: Where your repayment frequency is weekly or fortnightly, the original expiry date of your Term Loan will be extended by up to one month (The original expiry date is the date when your loan was due to close if your request for this COVID-19 Payment Break had not been accepted). On expiry of the Payment Break, your regular repayments will be adjusted as a result of the Payment Break which means that your Term Loan repayments will increase.

Interest will continue to accrue during the term of your Payment Break. As you are not making any repayments during this period, the interest not paid will be added to your Term Loan balance monthly. This means that your outstanding Term Loan balance will increase over the term of the Payment Break and interest will be charged on the interest not paid during this period.

This will have the following impact on your Term Loan:

  • Your Term Loan repayments will increase when you re-commence repayments; The overall cost of your Term Loan will be higher. This means that you will pay more interest over the remaining period of the loan, (See Question ‘What impact will a COVID-19 Payment Break have on my Term Loan?’ for examples of the impact of Payment Breaks on the cost of typical loans)

We recommend that you only apply for this Payment Break where you need to and that you seek independent financial and/or legal advice regarding any alteration to your Term Loan arrangements.

It is also important to understand that:

  • This COVID-19 Payment Break is an amendment to the existing Term Loan account.
  • Repayments on your Term Loan will automatically recommence on expiry of the agreed Payment Break period.
  • In the event that your circumstances change (either improve or dis-improve) during the term of the Payment Break or you are unable to meet the Term Loan repayments on expiry of the Payment Break, please  contact us as soon as possible where one of our Customer Care Agents will discuss the options available with you. 
Who can apply for a COVID-19 Term Loan Payment Break?

Existing Term Loan customers who can confirm the following can apply for a COVID-19 Term Loan Payment Break:

  • The Payment Break request is as a result of the current COVID-19 crisis causing a temporary reduction in your income (i.e. the income of either or both parties to the Term Loan).
  • Prior to the COVID-19 crisis you did not have any concerns about meeting your Term Loan repayments.
  • You are not currently in unauthorised arrears on any Lending facility with permanent tsb.

Please note that the COVID-19 Term Loan Payment Break application is subject to approval by the Bank. Lending criteria and terms and conditions apply.

What if I don’t meet the eligibility Criteria for a COVID-19 Term Loan Payment Break?

If you do not meet these criteria and have been financially impacted by COVID-19, we may still be in a position to support you. Please contact us on 1800 855 010 or +353 21 601 3700 where one of our Customer Care Agents will discuss the options available on your Term Loan. Our lines are open from Monday to Friday 9am until 6pm (excluding public holidays).

How do I apply for a COVID-19 Term Loan Payment Break?

To apply for a COVID-19 Term Loan Payment Break, you can contact one of our customer service agents on 1800 855 010 or +353 21 601 3700, who will bring you through the application process.

Our lines are open from Monday to Friday 9am until 6pm (excluding public holidays).

How long does it take to implement the COVID-19 Term Loan Payment Break?

The majority of payment breaks where payment for the loan is coming from a permanent tsb account – can be actioned within a matter of days. 

However, given the large volume of requests for COVID-19 Term Loan Payment Breaks, in the event you are paying by Direct Debit from another bank, you need to allow at least ten days before your Term Loan payment is due to allow us to assess and process your request. This is in part due to the fact that direct debits begin to be processed up to seven days in advance of the payment due date.

Where approved, we will make every effort to set up your COVID-19 Term Loan Payment Break before the next payment date is due, however, if we are unable to set up your Payment Break before the next payment date, the Payment Break will take effect from the following payment date. This situation will be confirmed to you prior to the change taking place.

Will a COVID-19 Term Loan Payment Break impact my credit history (e.g. Central Credit Register /Irish Credit Bureau record)?

No, this will not impact your credit history. If you are availing of an agreed COVID-19 Term Loan Payment Break with permanent tsb, your Term Loan will continue to be reported to the Central Credit Register / Irish Credit Bureau as if it were operating in line with your existing Term Loan arrangements. Please note: this relates to agreed COVID-19 Payment Breaks for Term Loans only.

What happens at the end of the COVID-19 Term Loan Payment Break?

At the end of the COVID-19 Term Loan Payment Break, your regular Term Loan repayments will automatically resume. Your repayments will be recalculated and will increase to take account of the Payment Break and allow you to pay the outstanding Term Loan balance over the remaining term of the loan.

*Please Note: Where your repayment frequency is weekly or fortnightly, the original expiry date of your Term Loan will be extended by up to one month (The original expiry date is the date when your loan was due to close if your request for this COVID-19 Payment Break had not been accepted). On expiry of the Payment Break, your regular repayments will be adjusted as a result of the Payment Break which means that your Term Loan repayments will increase.

The Bank will write to you before the end of the Payment Break to inform you of the options available to you following the end of your COVID-19 Payment Break, the three options are:

 

Option 1: Return to the arrangements that applied before your Payment Break, with your repayment adjusted accordingly;

Option 2: Extend your Payment Break for a further period, up to 3 additional months, subject to a maximum of 6 months in total;

Option 3: Contact our Customer Care Team to explore other potential arrangements. This includes the option to extend the term of the Term Loan by the length of your Payment Break.

 

If at the end of the Payment Break you are unable to return to your new monthly repayment amount, you will need to contact our customer service agents to discuss the options available.  

We will provide full contact details and information in the letter issued.

Will the interest rate on my Term Loan change as a result of taking a COVID-19 Payment Break?

The interest rate on your Term Loan will not change as a result of the COVID-19 Payment Break.

What impact will a COVID-19 Payment Break have on my Term Loan?

The Covid-19 Payment Break will have the following impact on your Term Loan:

  • The overall cost of your Term Loan will be higher. This means that you will pay more interest over the remaining period of the loan, (See Appendix for a representative cost of credit illustration);
  • Your Term Loan repayments will increase when you re-commence repayments; and
  • The additional interest may be collected after the expiry of the Term Loan.

The table below provides examples of the how the COVID-19 Term Loan Payment Break will result in an increase in repayment amounts at the end of the Payment Break and increase the overall Cost of Credit to you. The examples below are based on a typical Term Loan where no repayments are made for a period of three months. 

The exact cost for your Term Loan will depend on a number of factors including, the outstanding balance, remaining term and the interest rate.

Appendix: Representative Cost of Credit illustration

Term Remaining 2 Years 5 Years10 Years
Term Loan Balance €10,000.00 €10,000.00 €10,000.00
Current Interest Rate (fixed 3 years) 10.00% 10.00%  10.00% 
Current Monthly Repayment €461.45 €212.47 €132.15 
       
Monthly Repayment Amount (post payment break) €534.21 €226.69 €137.52 
Difference in Monthly Repayment Amount €72.76 €14.22 €5.37 
       
Balance in 3 months (with no payment break) €8,856.17 €9,609.35 €9,852.32 
Revised Balance in 3 months (post payment break) €10,252.55 €10,252.55  €10,252.55 
Difference in Balance €1,396.38 €643.20  €400.23
       
Total Amount Repayable (current) €11,074.80 €12,748.20  €15,858.00
New Amount Repayable €11,218.41 €12,921.33 €16,089.84
Difference in Amount Repayable €143.61 €173.13 €231.84

This table is for illustrative purposes only.

What impact will a COVID-19 Term Extension have on my Term Loan?

Where a customer has matured off a COVID-19 payment break and elects to extend their term under the COVID-19 Term Extension, the Bank will provide a Term Extension offer to the customer which is to be signed and submitted to the Bank within 30 days for the Term Extension to be put in place. Once received, we will confirm acceptance of the Term Extension with a confirmation letter.

The Term Extension cannot be greater than the length of your payment break.

Reporting to the Central Credit Register and Irish Credit Bureau will not be impacted by this COVID-19 Term Extension.

This means that your Term Loan will continue to report in line with your new loan arrangements; however we will not report the term extension.

COVID-19 Payment Break Guide

For information on payment breaks, how it will affect your loan, things to consider to help you decide if you need a payment break or extend your existing payment break, and more.

Log in to Open24

Our contact centre is very busy helping customers who are worried about the impact of COVID-19. Don’t forget, you can continue to carry out your day-to-day banking through Open24.ie

Cocooning during COVID-19

As an industry, we’ve come together to create a guide to help our customers manage their money while cocooning during this challenging time.

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