3-Month Personal Loan Payment Break – COVID-19

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Frequently Asked Questions


  • 1. How do I apply for a payment break or an additional payment break on my personal loan?

    To request a payment break, or to request an additional payment break, you can go to the Payment Break application form, or by calling 1850 222 200/01 488 2019 (our lines are open 9am-5pm, Monday to Friday).

    Closing date for applying for your first COVID-19 payment break is 30 September 2020.

  • 2. Am I eligible for a payment break on my personal loan?

    The payment break is available to personal loan customers who meet the following criteria. (If you need assistance and feel you don’t meet these criteria we may still be able to help you – please call us on 01 488 2019 our lines are open 9am to 5pm, Monday to Friday).

    Payment Break criteria

    You can apply for a payment break if you are an existing personal loan customer with us and meet the following criteria:

    • This is a precautionary1 request (my income has not reduced but I require a safety net) or it reflects a temporary reduction in my income which has occurred as a result of the current health crisis and I am not in financial difficulty and/or was not concerned about my ability to meet my repayments prior to COVID-19.
    • I am not in a forbearance arrangement with the Bank or, if I am, I have met all terms and conditions for a minimum of 6 months
    • I was not in arrears prior to March 2020 on any mortgage account or other BOI loan and thereafter not more than 2 months/payments in arrears on any other mortgage account/other BOI loans
    • Your loan must have been drawn down prior to the 16th March 2020 in order to avail of the 3 month payment break
    1Note: You should only apply for a payment break when you are satisfied you need one. Please see examples in ‘What impact will a payment break have on my overall cost of credit’ section. These examples are to help illustrate how payment breaks work. The figures for your own loan could be different. Your balance will be higher at the end of the payment break period, your term will be increased by the payment break period and you will pay more interest (increased cost of credit) which will need to be repaid as an additional payment.

  • 3. Will the application of a payment break mean I end up paying more interest?

    Yes, while no capital or interest repayments are made during the payment break, interest continues to accrue on the outstanding balance for that period. This means the balance owing will be higher after the payment break ends. If you feel confident you can afford to make some personal loan repayments during the payment break period or afterwards, you should consider doing so. Making any payment will help reduce the total amount of interest you pay over the term of the loan. We do not charge any fee if you make payments towards your loan in the Agreed Period (or make any extra payments at any other time).

  • 4. What impact will a payment break have on my overall cost of credit?

    Example 1: Here is a table of estimates based on a €10,000 loan at a rate of 7.5%; with a 3 month break taken after 1 year. We show you two columns of estimates, one for a current 3 year loan and one illustrating the impact of the payment break.

    CurrentPayment Break
    Original Term3 Years3 Years
    Personal Loan€10,000€10,000
    Current Interest rate 7.5%7.5%7.5%
    Current Monthly Repayments€309.96€309.96
    Payment BreakNOYES (3 – Months 13, 14, 15)
    Future repayments (post break)€309.96€309.96
    Monthly Repayment Difference€0€0
    Projected Balance at end month 15 (post break)€6,058.28€6,990.07
    Total Amount Repayable€11,158.56€11,309.02
    Increase in cost of credit€150.46*

    *This table is to help illustrate how 3 month payment breaks work. The figures for your own loan could be different. The term (period) of the loan will be extended by 3 months to make up for the 3 month break period and an additional payment will be needed to clear the extra interest that results from the payment break.

    Example 2: Here is a table of estimates based on a €10,000 loan at a rate of 7.5%; with a 3 month break taken after 2 years. We show you two columns of estimates, one for a current 3 year loan and one illustrating the impact of the payment break.

    CurrentPayment Break
    Original Term3 Years3 Years
    Personal Loan€10,000€10,000
    Current Interest rate 7.5%7.5%7.5%
    Current Monthly Repayments€309.96€309.96
    Payment BreakNOYES (3 – Months 25, 26, 27)
    Future repayments (post break)€309.96€309.96
    Monthly Repayment Difference€0€0
    Projected Balance at end month 27 (post break)€2,701.08€3,632.87
    Total Amount Repayable€11,158.56€11,231.26
    Increase in cost of credit€72.70*

    *This table is to help illustrate how 3 month payment breaks work. The figures for your own loan could be different. The term (period) of the loan will be extended by 3 months to make up for the 3 month break period and an additional payment will be needed to clear the extra interest that results from the payment break.

    • The COVID-19 payment break means there will be no standing order payments from your current account to your personal loan for 3 months.
    • We will continue to add interest to your personal loan during the payment break. In example 2 above, for the 3 year loan whereby the payment break is taken from month 25, interest at 7.5% continues to be applied to the account, resulting in a personal loan balance at the end of 3 months of €3,632.87. Without the payment break the personal loan balance would have been €2,701.08.
    • At the end of the break period, your standing order payments from your current account will automatically resume.
    • The term (period) of the loan will be extended by 3 months to make up for the 3 month break period and an additional payment will be needed to clear the extra interest that results from the payment break. In example 2 for the 3 year loan this additional payment will be €72.70 that results from the payment break and will need to be repaid to clear the balance of the loan.
    • If you feel confident that you can afford to make some payments toward your loan in the payment break, you should consider doing so. That will reduce the total amount of interest you will have to pay over the period of the loan. You should only apply for a payment break when you are satisfied you need it.

    Example 3: Here is a table of estimates based on a €10,000 loan at a rate of 7.5%; with a 6 month break (two consecutive 3 month payment breaks) taken after 1 year. We show you two columns of estimates, one for a current 3 year loan and one illustrating the impact of the payment break.

    CurrentPayment Break
    Original Term3 Years3 Years
    Personal Loan€10,000€10,000
    Current Interest rate 7.5%7.5%7.5%
    Current Monthly Repayments€309.96€309.96
    Payment BreakNOYES (6 – Months 13, 14, 15, 16, 17, 18)
    Future repayments (post break)€309.96€309.96
    Monthly Repayment Difference€0€0
    Projected Balance at end month 18 (post break)€5,242.99€7,122.21
    Total Amount Repayable€11,158.56€11,462.33
    Increase in cost of credit€303.77

    *This table is to help illustrate how two consecutive 3 month payment breaks work (6 month payment break in total). The figures for your own loan could be different. The term (period) of the loan will be extended by 6 months to make up for the 6 month break period and an additional payment will be needed to clear the extra interest that results from the payment break

    Example 4: Here is a table of estimates based on a €10,000 loan at a rate of 7.5%; with a 6 month break (two consecutive 3 month payment breaks) taken after 2 years. We show you two columns of estimates, one for a current 3 year loan and one illustrating the impact of the payment break.

    CurrentPayment Break
    Original Term3 Years3 Years
    Personal Loan€10,000€10,000
    Current Interest rate 7.5%7.5%7.5%
    Current Monthly Repayments€309.96€309.96
    Payment BreakNOYES (6 – Months 25, 26, 27, 28, 29, 30)
    Future repayments (post break)€309.96€309.96
    Monthly Repayment Difference€0€0
    Projected Balance at end month 30 (post break)€1,822.33€3,701.55
    Total Amount Repayable€11,158.56€11,305.33
    Increase in cost of credit€146.77*

    *This table is to help illustrate how two consecutive 3 month payment breaks work (6 month payment break in total). The figures for your own loan could be different. The term (period) of the loan will be extended by 6 months to make up for the 6 month break period and an additional payment will be needed to clear the extra interest that results from the payment break.

    • The COVID-19 payment break means there will be no standing order payments from your current account to your personal loan for 6 months.
    • We will continue to add interest to your personal loan during the payment break. In example 4 above, for the 3 year loan whereby the payment break is taken from month 25, interest at 7.5% continues to be applied to the account, resulting in a personal loan balance at the end of the 6 month break of €3,701.55. Without the payment break the personal loan balance would have been €1,822.33.
    • At the end of the break period, your standing order payments from your current account will automatically resume.
    • The term (period) of the loan will be extended by 6 months in total to make up for the 6 month break period and an additional payment will be needed to clear the extra interest that results from the payment break. In example 2 for the 3 year loan this additional payment will be €146.77 that results from the payment break and will need to be repaid to clear the balance of the loan.
    • If you feel confident that you can afford to make some payments toward your loan in the payment break, you should consider doing so. That will reduce the total amount of interest you will have to pay over the period of the loan. You should only apply for a payment break when you are satisfied you need it.

    Example 5: Here is a table of estimates based on a €10,000 loan at a rate of 7.5%; with a 3 month break taken after 1 year. We show you three columns of estimates, one for a current 3 year loan, one illustrating the impact of the payment break and one illustrating the example of if you chose to return to the original term of the loan. In this scenario; you would have applied for a 3 month break and subsequently requested us to restructure the loan. This option is outlined in the FAQs guide under Question 16; it is also outlined how you can request such an option.

    CurrentPayment BreakRestructured Loan
    Original Term3 Years3 Years21 Months
    Personal Loan€10,000€10,000€6,990.07
    Current Interest rate 7.5%7.5%7.5%7.5%
    Current Monthly Repayments€309.96€309.96€355.45
    Payment BreakNOYES (6 – Months 13, 14, 15, 16, 17, 18)
    Future repayments (post break)€309.96€309.96€355.45
    Monthly Repayment Difference€0€0€45.49
    Projected Balance at end month 18 (post break)€6,058.28€6,990.07€6,990.07

    (Restructuring amount)
    Total Amount Repayable€11,158.56€11,309.02Old Loan Payments: €3,719.52

    New Restructured Loan Payments: €7,464.45

    Total: €11,183.97
    Increase in cost of credit€150.46*€25.41

    *This table is to help illustrate how 3 month payment breaks work. The figures for your own loan could be different. The term (period) of the loan will be extended by 3 months to make up for the 3 month break period and an additional payment will be needed to clear the extra interest that results from the payment break. If you subsequently request a restructure, we will close the existing loan and set up a new one. The repayments under the new loan will be higher because you did not make repayments during the repayment break while interest continued to build up and the term is reduced

    • The COVID-19 payment break means there will be no standing order payments from your current account to your personal loan for 3 months.
    • We will continue to add interest to your personal loan during the payment break. In example 5 above, for the 3 year loan whereby the payment break is taken from month 13, interest at 7.5% continues to be applied to the account, resulting in a personal loan balance at the end of the 3 month break of €6,990.07. Without the payment break the personal loan balance would have been €6,058.28
    • In the above illustration in the third column, we show you the impact of if you chose to return to the original term of the loan i.e. 3 years in total. In this instance we will close the existing loan and set up a new one for 21 months. The repayments under the new restructured loan will be higher because you did not make repayments during the repayment break period, interest continued to build up during this period and the term is reduced in order to get back to the original term of 3 years. As interest continued to be added during this period on a higher outstanding balance will result in a higher cost of credit of €25.41 compared to the original loan. This €25.41 is lower than the €150.46 in the second column due to higher monthly repayments and reverting back to the original term.

    If you should require more information in relation to the increased cost of credit on your specific loan please contact us on 1850 222 200.

  • 5. What are the key points to think about in respect of a personal loan payment break?

    • You will owe more at the end of the payment break period than at the start of the payment break.
    • The term (period) of the loan will be extended by the period of the payment break.
    • We will continue to add interest to your loan daily, including during the payment break period. This means that you will pay more interest over the period of your loan than would be the case if the arrangement was not put in place. That is because none of the loan will be repaid and no interest will be paid during the payment break. This will mean an additional final payment will be needed to clear the extra interest that results from the payment break.
    • If you feel confident that you can afford to make some payments toward your loan in the payment break, you should consider doing so. That will reduce the total amount of interest you will have to pay over the period of the loan.
    • You should only apply for a payment break when you are satisfied you need it.
    • If you have any doubts about the payment break, we strongly recommend you get independent legal or financial advice.

  • 6. Will my personal loan interest rate change if I apply for a payment break and are there any additional charges associated with payment breaks?

    No, your personal loan rate will not change if you apply for a payment break and there are no additional charges for applying. The cost of credit will be higher as outlined in Question 3.

  • 7. What if I need my payment break to start sooner than in 5 working days?

    Generally it takes about 5 working days to set up a payment break. If you are faced with urgent financial difficulty and need immediate support, we may be able to help. For example, we may be able to reverse or refund a standing order you have paid. If you think you need such urgent help please call us on 01 488 2019.

  • 8. How long will it take to put the payment break in place after I apply?

    We are dealing with unprecedented demand for payment breaks and we are processing breaks as quickly as possible. If a standing order is taken from your current account to make a loan payment after you request a payment break, we will back-date your payment break by paying the money back to your current account. You don’t have to do anything.

  • 9. Will I be told when the payment break for my personal loan in in place?

    Yes. If you apply online or over the phone you will receive a confirmation letter acknowledging that your request has been processed.

  • 10. Will a COVID-19 personal loan payment break affect my Credit History?

    You will not go into arrears as a result of this payment break. If you are in arrears already they will not increase as a result of this payment break. A payment break put in place for a customer to help them deal with the financial consequences of Covid-19 will not result in an adverse credit record in the Central Credit Register or the Irish Credit Bureau.

  • 11. Do I need to have savings in my current or deposit account to get a payment break?

    No the Bank has no rules in place requiring a certain amount of money in a current or savings account to qualify for a payment break.

  • 12. If my personal loan is in the name of two or more people, how do I apply for a payment break?

    We will ask for the name and date of birth of each borrower when you apply for a payment break – over the phone and online.

  • 13. If I have more than one personal loan, do I have to apply for each payment break separately?

    Yes, if you have more than one personal loan with us you will need to apply separately for a payment break for each loan.

  • 14. What happens to my personal loan during a payment break?

    During the payment break you are not required to make any repayments (interest or capital) and we will stop taking standing orders from your current account.

    While you will not be required to make payments during the payment break, it is important to note that we will still add interest to your personal loan. As a result, you will owe more under your personal loan at the end of the payment break.

    You can make partial or full monthly personal loan payments while the payment break is in place if you are comfortable that you can afford to do this. You can make an online transfer or call us on 0818 365 365. Making any payment will help reduce the total amount of interest you pay over the term of the loan.

  • 15. What happens at the end of a payment break on my personal loan?

    At the end of the payment break, your personal loan standing orders will automatically resume.

    Before the payment break ends, we will write to you giving you the options available to you then. In the letter we will outline the options available to you and how you can contact us.

    For customers who have availed of their first payment break the above options are also outlined in Question 16.

    For customers who have availed of an additional payment break the options are also outlined in Question 17.

  • 16. What are my options following my first personal loan payment break?

    Before the payment break ends, we will write to you giving you the options available to you then. In the letter we will outline the following four options available to you:

    Option 1:

    Resume repaying your personal loan. You do not need another payment break and want to return to full personal loan repayments. If you choose this option you don’t need to do anything

    If you are satisfied that you will be able to return to making full capital and interest repayments in order to repay your personal loan, we encourage you to do that.

    As you make no repayments during your Covid-19 3-month payment break, while interest continues to add up, you will pay more interest over the term of your loan than you would if you hadn’t taken a break.

    To pay off the loan, you will now have to make loan repayments for 3 months longer than the original loan term and you will need to make an extra payment to clear the extra interest that built up during the break.

    You can find out more in our FAQ guide on our website at boi.com/loanpaymentbreakfaqs to see examples showing the impact of the cost of credit on your personal loan. These examples show what option 1 means for you. They are for illustrative and guidance purposes only. The figures for your own loan could be different. The calculations assume the interest rate on your personal loan will not change for the rest of your loan term.

    If I choose option 1, what do I need to do now?

    You don’t need to do anything. The standing order will automatically start again after the 3-month payment break ends.

    Option 2:

    You are still experiencing a temporary interruption in your income and want to apply for an additional break.

    If you are still affected by Covid-19, you can apply for an additional 3-month payment break similar to the payment break you are on now.

    You won’t have to make repayments during the additional payment break. It will extend the term of your personal loan by another 3 months, interest will continue to add up during it and taking the break will further increase the overall interest cost of your personal loan.

    The impact of both payment breaks will mean that you will be making loan repayments for 6 months longer than your original term and you’ll need to make an additional payment to clear the extra interest.

    You can find out more in our FAQ guide on our website at boi.com/loanpaymentbreakfaqs to see examples showing the impact of the cost of credit for your personal loan. These examples show what option 2 would mean for you. As with option 1, these examples are for illustrative and guidance purposes only. The figures for your own loan could be different. The calculations assume the interest rate on your personal loan will not change for the rest of your loan term.

    If you feel confident you can afford to make some personal loan repayments during the payment break period or afterwards, you should consider doing so. Making any payment will help reduce the total amount of interest you pay over the term of the loan. We do not charge any fee if you make payments towards your loan in the Agreed Period (or make any extra payments at any other time).

    If I choose option 2, what do I need to do now?

    If you want to apply for an additional 3-month payment break, please apply through our website at boi.com/loanpaymentbreakfaqs. The criteria to qualify for an additional payment break are shown on the website. If you don’t meet these criteria, you can still apply using the online application form. One of our agents will call you to go through your application in more detail.

    You will not go into arrears as a result of this arrangement. If you are in arrears already they will not increase as a result of this arrangement. A short term payment break put in place for a customer to help them deal with the financial consequences of Covid-19 will not result in an adverse credit record in the Central Credit Register or the Irish Credit Bureau.

    If you choose this option and apply on our website, we will be in touch with you again at least two weeks before the end of this additional 3-month payment break to talk about your future options.

    Option 3:

    You do not need another payment break and you want us to restructure the loan to clear the balance within the original term

    To restructure your existing loan, we will close the existing loan and set up a new one. The repayments under the new loan will be higher because you did not make repayments during the payment break while interest continued to build up.

    Check out boi.com/loanpaymentbreakfaqs for more on what this option could mean for you, with examples showing the impact of the cost of credit on personal loans. These examples are for guidance purposes only. The figures for your loan could be different. The calculations assume the interest rate on your personal loan will not change for the rest of your loan term.

    If I choose option 3, what do I need to do?
    Please call us 0818 200 401 (our lines are open 9am-5pm, Monday to Friday) and we will be happy to discuss this with you.

    Option 4:

    Other supports. You are concerned that you may experience longer-term financial pressure and want to explore additional supports to help you repay your personal loan.

    Option 4 may be for you if you are concerned that the impact on your finances of Covid-19 could be longer-lasting or that there may be other reasons why you may not be able to meet the repayments on your personal loan after your payment break ends.

    We may need you to complete a Standard Financial Statement (SFS) if you choose this option. The SFS is a standard form set out by the Central Bank of Ireland designed to give us an accurate picture of your financial circumstances. As well as helping us find the best solution for you, it ensures that we meet our duty to give you the full benefit of the legal protections that apply to you.

    It can take time to complete an SFS and, if you need a second 3-month payment break to give you time to do this, we can consider that.

    If you take up longer term support under option 4 it will be treated as forbearance (an alternative payment arrangement to help you deal with or avoid arrears) and will be recorded as such in the Central Credit Register and the Irish Credit Bureau. That may affect you if you look for new loans or credit in future.

    If I choose option 4, what do I need to do now?
    Please call our arrears team on 1850 222 200. They are trained to discuss the measures available and will help you work out the most appropriate action for your circumstances.

  • 17. What are my options following my additional personal loan payment break? (For customers who have availed of two 3 month payment breaks)

    Before the payment break ends, we will write to you giving you the options available to you then. In the letter we will outline the following three options available to you:

    Option 1:

    Resume repaying your personal loan. You do not need another payment break and want to return to full personal loan repayments. If you choose this option you don’t need to do anything.

    If you are satisfied that you will be able to return to making full capital and interest repayments in order to repay your personal loan, we encourage you to do that.

    As you make no repayments during your two Covid-19 3-month payment breaks, while interest continues to add up, you will pay more interest over the term of your loan than you would if you hadn’t taken the payment breaks.

    To pay off the loan, you will now have to make loan repayments for 6 months longer than the original loan term and you will need to make an extra payment to clear the extra interest that built up during the break.

    You can find out more in our FAQ guide on our website at boi.com/loanpaymentbreakfaqs to see examples showing the impact of the cost of credit on your personal loan. These examples show what option 1 means for you. They are for illustrative and guidance purposes only. The figures for your own loan could be different. The calculations assume the interest rate on your personal loan will not change for the rest of your loan term.

    If I choose Option 1, what do I need to do now?
    You don’t need to do anything. The standing order will automatically start again after your extended payment break ends.

    Option 2:

    Restructure your personal loan. If you are not in financial difficulty and you wish to restructure the loan to clear the balance within the original term.

    To restructure your existing loan, we will close the existing loan and set up a new one. The repayments under the new loan will be higher because you did not make repayments during the payment break while interest continued to build up.

    Check out boi.com/loanpaymentbreakfaqs for more on what this option could mean for you, with examples showing the impact of the cost of credit on personal loans. These examples are for guidance purposes only. The figures for your loan could be different. The calculations assume the interest rate on your personal loan will not change for the rest of your loan term.

    Option 3:

    Other supports: You are concerned that you may experience longer-term financial pressure and want to explore additional supports to help you repay your personal loan.

    Option 3 may be for you if you are concerned that the impact on your finances of Covid-19 or could be longer-lasting or that there may be other reasons why you may not be able to meet the repayments on your personal loan after your payment break ends.

    We may need you to complete a Standard Financial Statement (SFS) if you choose this option. The SFS is a standard form set out by the Central Bank of Ireland designed to give us an accurate picture of your financial circumstances. As well as helping us find the best solution for you, it ensures that we meet our duty to give you the full benefit of the legal protections that apply to you.

    If you take up longer term support under option 3 it will be treated as forbearance (an alternative payment arrangement to help you deal with or avoid arrears) and will be recorded as such in the Central Credit Register and the Irish Credit Bureau. That may affect you if you look for new loans or credit in future.

    If I choose Option 3, what do I need to do now?
    Please call our arrears team on 1850 222 200. They are trained to discuss the measures available and will help you work out the most appropriate action for your circumstances.


 
Apply for a COVID-19 Three Month Personal Loan payment break

WARNING: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.

WARNING: The cost of your monthly repayments may increase.

Bank of Ireland is regulated by the Central Bank of Ireland.