Extraordinary legislative actions concerning lending activity

• The Government announced a payment moratorium for all debtors of commercial loans until 31 December 2020. (The period of the moratorium may be extended by the Government.)
• The debtor receives a moratorium regarding the payment of capital, interest and fees to be paid in accordance with a credit, loan or finance lease contract and loans provided by employers.
• The payment moratorium applies to existing loan contracts based on which the amount of loan has already been disbursed at 24:00 on 18 March 2020.
• However, the moratorium shall not apply to loan contracts of i) the State, ii) the local governments, iii) the organizations under the supervision of Hungarian National Bank (not included financial enterprises and investment funds).
• The deadline for performing the contractual obligations is extended by the period of the payment moratorium. The amount of interest arising in the course of the moratorium shall be paid in equal annual installments after the expiry of the moratorium.
• The moratorium automatically covers collateral. The legislation makes no distinction between guarantees provided under Hungarian law and foreign law.
• The moratorium automatically applies to loan contracts and it does not require any contractual declaration of the parties.
• The payment moratorium does not affect the debtor's right to perform in accordance with the original contractual terms.

In case of consumer loans not secured by mortgage and concluded after 19 March 2020, the annual percentage rate of charge should not exceed the central bank base rate plus 5 percentage points.

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