Aside reading this article regarding the mandatory grace period given for the payment of loan, read also: WHAT IS A CONTRACT OF LOAN?
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A one-time sixty (60) day grace period is granted for the payment of all existing, current and outstanding loans
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All loans may be settled on a staggered basis without interest on
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Parties may still mutually agree for a grace period longer than sixty (60) days
Mandatory sixty (60) day grace period for the payment of loans may be extended.
In our previous article, we talked about grace period for the payment of utilities and rents under the Bayanihan to Recover as One Act. This time, let us talk about the mandatory sixty (60) day grace period.
The law says:
Banks, quasi-banks, financing companies, lending companies, real estate developers, insurance companies providing life insurance policies, pre-need companies, entities providing in-house financing for goods and properties purchased, asset and liabilities management companies, and other financial institutions, public and private, including the Government Service Insurance System (GSIS), the Social Security System (SSS) and Home Development Mutual Fund (Pag-IBIG Fund) are directed to implement a mandatory sixty (60) day grace period to be granted for the payment of all existing, current and outstanding loans falling due on or before December 31, 2020. However, please take note that the 60-day mandatory grace period may be extended by the agreement of the parties.
What is the effect of the grace period?
The law says:
The implementation of the mandatory one-time 60-day grace period will effectively extend the maturity of the said loans. During the grace period, the above-mentioned institutions shall not impose interest on interests, penalties, fees, or other charges representing charges against the borrower for late payment or non-payment on due date.
The principal and accrued interest for the 60-day grace period may be paid by the borrower on a staggered basis until December 31, 2020 or as may be agreed upon by the parties. Nonetheless, this shall not preclude the borrower from paying the principal and accrued interest in full on the new due date following the application of the 60-day grace period.
May the 60-day grace period be waived?
The law says:
No.
Covered institutions are prohibited from requiring their clients to waive the application of the mandatory one-time 60-day grace period. Nonetheless, the grant of the grace period does not preclude the borrowers from choosing not to avail of the said grace period and paying their obligations as they fell due.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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