Borrowers have one more opportunity to participate in the plan for the management of terminated/expired/non-performing loans, which were granted after the approval of the Central Agency for Equal Burden Distribution (KFIKB), after the decision of the Council of Ministers on July 12, 2023 for the extension of the Plan under the same conditions until October 31, 2023.
In her statements to KYPE, the Director of KFIKB, Loukia Efstathiou, called on eligible borrowers to participate in the Ministry of Finance Scheme "to respond quickly in order not to lose this right, which is very important", as they are given the opportunity to write off all interest on their loan.
In particular, Mrs. Efstathiou emphasized that "new letters will not be sent to those who are potentially eligible, i.e. those who had received an information letter that they are eligible for inclusion during the previous period that the Scheme ran, but did not express interest to the bank or expressed interest but did not submit restructuring request either to the Agency or to the banks, we call on them to respond quickly in order not to lose this right of theirs which is very important".
The Director of the Agency said that there was a response to the previous times, that the scheme ran, "but not the expected one, hence the Ministry of Finance recently submitted a proposal to the Council of Ministers to reopen the Scheme for a short period of time".
He noted that after the plan closed there were people who were interested late and wanted to participate in that particular plan.
Citing data on loans granted with KFIKB funds and which concern students, for medical care and for professional purposes, Mrs. Efstathiou told KYPE that those potentially eligible during the previous period that the specific Plan ran were 4.724 and they had expressed interest for participation in the Plan 3.128, while "only 1.617 submitted a restructuring request to KFIKB".
"It is understood that there is a large number of beneficiaries (for participation in the Scheme) who did not express interest and did not submit a restructuring request", he underlined and noted that these borrowers "have one last chance to do so as soon as possible".
He stated that the beneficiaries of the Plan are borrowers who had NED on December 31, 2019 and by joining this Plan they had the right to either restructure their loan or pay it off and be given the total interest of the loan.
Explaining further, on the matter, Mrs. Efstathiou said that based on the Scheme, from the initial amount of the loan, the installments paid so far by the beneficiary applicant for participation in the Scheme are deducted and at the same time the total interest is given away, which will "marginalised" and will only be written off upon repayment of the original loan amount, provided the borrower adheres to the agreed loan restructuring plan.
Regarding the borrowers who will choose the immediate repayment of the loan, Ms. Efstathiou said that for them the total interest will be written off immediately.
The Financial Organizations participating in the Plan are KFIKB, the Housing Finance Organization (OHS), the Cooperative Asset Management Company (SEDIPES), the Cyprus Asset Management Company (KEDIPES) and Hellenic Bank.
Low interest student loan
Besides, the Director of KFIKB told KYPE that in view of the start of the new academic year next September, the Agency continues to grant low-interest student loans with an interest rate of only 1%, adding that this particularly low interest rate is very important for the borrower in a period like today where interest rates are constantly rising.
In the Ministry of Finance, the new lending plans and regulations
In addition, Mrs. Efstathiou said that the new lending plans and the relevant regulations of the KFIKB have been sent at the end of June 2023 to the Ministry of Finance for examination and then they will be sent to the Legal Service of the state for legal technical control and then they will be submitted to the Parliament for vote.
He referred to significant changes coming to the Agency's Lending Schemes which are all for the benefit of owner occupied properties.
The plans, among others, include increasing the amount for a home loan to €200.000 from €130.000, increasing the interest subsidy to 30 years from 20 years previously, increasing the living expenses on student loans and not counting the loan plans or interest subsidy.
Source: KYPE