HSBC Loan Deferment

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HSBC is a leading bank in the UAE and around the world. Present in the UAE since 1946, the bank offers savings accounts, deposits, and loans to its retail and commercial customers. With this bank, you can avail of personal loan in UAE and several other financing options to fund your financial requirement. These loans have flexible repayment tenures and can repaid in affordable instalments, meaning that you can easily repay the borrowed amount with interest without much difficulty.

However, in some cases, you may face a financial contingency that may make you unable to pay the monthly EMI. In such cases, you can take the option of HSBC loan deferment. Let’s go through the article below to understand the HSBC loan deferment process, also known as a Payment Holiday, in detail.

 

What is HSBC Loan Deferment?

The bank offers HSBC loan deferments in the form of Payment Holidays to borrowers who are unable to pay an EMI in case of any financial adversity. You can request HSBC for a Payment Holiday if you clear the eligibility requirements to have the bank offer you a holiday of a month or more.

The Payment Holiday is available for all borrowers of the bank. However, given many individuals' pandemic-related financial difficulty, HSBC offered a special deferment for its customers. This deferment offered them a Payment Holiday of up to 3 months if they suffered from COVID-19 or incurred any financial hardship due to the pandemic. 

How to Initiate the HSBC Loan Deferment Process?

To avail of a Payment Holiday for your HSBC loan, simply follow these steps – 

  • Submit your application to the bank for HSBC loan deferment – this can be done via phone or any other valid method 
  • Submit the supporting documents along with the application
  • The bank will examine your previous financial history and credit Score, and whether you qualify for the eligibility criteria 
  • If your application is approved, HSBC will send a confirmation letter that would also contain the deferment start and end dates

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HSBC EMI Loan Deferment

EMI deferment means postponing the due EMI to the next or subsequent months, which is the same as applying for a Payment Holiday. When you apply for a Payment Holiday, you are, in effect, asking for an EMI deferment. This allows you to skip EMI payments in one or more months and pay them later. Keep in mind that as the EMIs are pushed to subsequent months, the overall loan tenure will increase by the holiday period in this case.

Things to Keep in Mind for HSBC Personal Loan Deferment

As we saw earlier, when you apply for a deferment, the EMI is pushed to subsequent months. Nevertheless, it is essential to note that after a successful application for the Loan Deferment, the loan period and the number of instalments increases. 

The duration by which the total loan period increases depends on a number of factors – 

  • The interest accrued during your Payment Holiday.
  • The total number of Payment Holidays used by you 
  • The remaining duration of the loan period

Another point to note is that you would have to pay higher interest on the loan if you get a payment holiday. This is because the interest will continue to accrue on the loan during the deferment period.

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Features & Benefits of HSBC Personal Loan Deferment in UAE

Some of the key features and benefits of HSBC Personal Loan Deferment are as follows –

  • The deferment allows you to avoid EMI payments when you are stuck in a financial crisis. You can delay the EMIs and pay them later when your financial position improves.
  • For customers impacted by COVID-19, the bank has simplified the process of availing of a Payment Holiday. You just have to submit an application along with the documentation proof to get a Payment Holiday of up to 3 months. 
  • The application and confirmation of the HSBC loan deferment have been digitised for ease and convenience
  • The Payment Holiday is available for personal, home, and auto loans

Fees & Charges for HSBC Loan Deferment

If you are seeking HSBC loan deferment due to COVID-related impact, no fee would be levied by the bank. Here, you can enjoy the Payment Holiday without any additional burden.

However, if you apply for the same in the regular course, you may have to pay a fee for the same. For instance, in the case of personal loans, the bank charges a fee of AED 100 plus VAT, i.e., AED 105 in total, for each Payment Holiday you apply for. 

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How Does HSBC Loan Deferment Affect Your Credit Score?

If your loan deferment application is approved by HSBC, it won’t report those specific EMIs to the al etihad credit bureau (AECB) as missed EMIs. Thus, the record of your EMI payment stays intact, and your score stays as it is. 

This, as you may expect, is not applicable if you miss EMI payments without prior approval from HSBC. This would be counted as missed payments, which would be duly reported by the bank to the AECB. The impact of this would be visible on your credit score, which would get reduced. 

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FAQs

What is the maximum duration offered as a Payment Holiday by HSBC Bank in UAE?

A tenure of up to 3 months is offered as the period of Payment Holiday or Loan Deferment.

Can a person apply for multiple Payment Holidays on different loans simultaneously?

Yes, HSBC Bank offers the opportunity to apply for multiple Payment Holidays at the same time.

How long does HSBC take to process a Payment Holiday application?

A Payment Holiday application is usually processed between 3 to 5 days.

Can the instalment date be changed during the duration of the Loan Deferment?

HSBC does not allow you to change the date of instalment during Payment Holiday.

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