Covid -19 has put the world on pause. It’s, unfortunately, making many sick, but it is also taking many businesses on a major roller coaster ride! The financial disaster that Covid -19 is causing is unfortunately tremendously big! Many people are now out of a job; they have lost their income, And have no financial security.
Everyone is working together to fight the virus, even the big banks. Many banks announced great relief and hardship programs to help consumers that were affected.
Some are offering to wave minimum payments for one or two months. Many banks are even offering to waive the interest as well!
1. Please be aware that these programs are only available for consumers who contact the bank before being late on the payments. If you do not contact the bank and you end up being late on the payments then your payments will be reported late just like any other month.
2. Its recommended to get these agreements in writing and it should clearly state that joining the program will not have any impact on your credit whatsoever.
3. Please keep in mind that joining a hardship program can possibly affect your relationship with the bank. Meaning, when, or if, you later apply for a new credit card at the same bank, the bank might decline you due to your negative relationship.
4. Mortgage Loans: Do not confuse the forbearance program with a loan modification. The forbearance program will not affect your credit score but a loan modification will damage your credit. Say no to any loan modification! And as mentioned above its recommended to get these agreements in writing.
Here is a list of data points we got about different programs available by each creditor.
Amex is offering to waive minimum payments, late fees and interest for up to two months on personal and business cards.
There are some data points that once you join the hardship program your credit card and rewards points will be frozen until you exit the program.
Apple is offering to waive minimum payments, late fees, and interest for up to two months.
Bank Of America:
Bank Of America is offering to waive minimum payments, late fees and interest for up to two months.
Chase is offering to waive your minimum payment, late fees, for one month on personal and business cards. Chase is not waiving the interest.
Capital One is offering to waive minimum payments, late fees and interest for up to two months on personal and business cards.
Discover is offering to waive your minimum payment and late fees for one month. Discover is not waiving the interest.
TFC is offering to waive up to two lease payments and even extend your lease for two months!
HFS is offering to waive up to two lease payments and even extend your lease for two months free!
Lincoln is offering to waive up to two lease payments for free!
Ally Bank is offering to defer payments for up to 120 days on auto loans!
M&T Bank is offering its clients a personal loan for up to $5,000 for 2.99% interest.
Be Aware: Do not confuse the forbearance program with a loan modification. The forbearance program will not affect your credit score but a loan modification will damage your credit. Say no to any loan modification! And as mentioned above its recommended to get these agreements in writing.
NYS Mortage Loans:
The New York State Department of Finance has recommended mortgage lenders do the following;
- Forbearing mortgage payments for 90 days from their due dates.
- Refraining from reporting late payments to credit rating agencies for 90 days.
- Offering mortgagors an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 pandemic does not affect their ability to obtain permanent loan modifications.
- Waiving late payment fees and any online payment fees for a period of 90 days.
- Postponing foreclosures and evictions for 90 days.
- Ensuring that mortgagors do not experience a disruption of service if the mortgage servicer closes its office, including making available other avenues for mortgagors to continue to manage their accounts and to make inquiries.
- Proactively reaching out to mortgagors via app announcements, text, email or otherwise to explain the above-listed assistance being offered to mortgagors.
Every mortgage lender has there own terms on what will happen with the skipped payments after the 90 days. Some will request you to pay a lump sum of all the missed payments. Some will slowly increase your monthly payments. And some will extend your mortgage loan for 3 months. Call your creditor to inquire about their terms.
Remember payments are only forgiven if you call and manually join the program. Do not skip any payments without first calling your lender.
Fannie Mae and Freddie Mac:
Fannie Mae and Freddie Mac are offering the following for all mortgage loans owned by them (you can check to see who owns your mortgage loan with the Fannie Mae and Freddie Mac lookup tool ).
• Homeowners who are adversely impacted can contact their mortgage servicer.
• Foreclosure sales and evictions of borrowers are suspended for 60 days.
• Homeowners may be eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months.
• Negative credit bureau reporting is suspended for eligible forbearances.
• Homeowners in a forbearance plan will not incur late fees.
• After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification.
If you bumped into any other program not listed here, or if you had other results after contacting your creditor please let us know in the comments.
You may also want to read our great post on how 0% APR credit card may help you manage your cash flow