- Grace period. Loan/leasing payments will be deferred for chosen period and deferred payments will be proportionally added to the outstanding loan/leasing payments for the remaining agreement maturity that is not changed (in this case, the amount of monthly payments will increase after the grace period is over).
- Grace period and maturity prolongation. The loan/leasing maturity will be extended for chosen period and each loan/leasing payment will be deferred for this period.
- Maturity prolongation. The loan/leasing maturity will be extended for chosen period (in this case, the amount of monthly payments will decrease)
- We have the right to refuse to grant your application.
- A grace period is applicable only for loans, repaid amounts whereof cannot be granted repeatedly, and for leasing. If you would like to change the terms and conditions of the credit line, overdraft, direct payment loan, business credit card, guarantee limit, factoring or operational leasing, please submit your application by writing a free-form message on the Internet Bank for Business.
- You should also write a free-form message if you are not satisfied with our offered grace period possibilities.
- The application is not applicable for private persons’ loans or leasing – if you have such, you may submit an application for a grace period of payments through the Internet Bank for private clients.
- A grace period is applicable only to the payment of principal of loan/leasing – you will continue paying the interest, insurance premiums and other payments as per the agreement.
- We would like to note that the credit history of the customer has a direct influence on the credit terms and sometimes can reduce possibility of obtaining a credit in future.
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If reduced income, business difficulties or other circumstances make it difficult to make your loan or leasing payments on time, we encourage you to contact the bank as early as possible. Together, we will find the best solution. Possible solutions include:
- reducing or deferring monthly payments;
- prolonging the loan maturity;
- changing the loan terms and conditions;
- allowing you to sell or re-pledge the property;
- finding an individual solution.
If loan payments are not made on time, the overdue debt increases, and interest and contractual penalties (late payment fees) are charged.
- The bank informs the customer about the outstanding debt and provides a deadline for repaying it. If no agreement is reached on a solution or amendment of the agreement terms within the specified period, the loan agreement may be terminated.
- Upon termination of the agreement, the entire outstanding loan amount, interest, late payment fees and other payments must be repaid immediately. If the debt is not repaid, debt recovery proceedings may be initiated.
If repayment of the loan was not secured by a mortgage or pledge of property
- The bank applies to the court for recovery of the debt;
- Once the court decision becomes final, a writ of execution is issued;
- The writ of execution is transferred to a bailiff for enforcement;
- The bailiff initiates enforcement proceedings in accordance with the procedure established by law.
Important! Applying to the court for recovery of the debt increases the amount of the debt due to additionally accrued procedural interest and legal costs. If enforcement of the court decision is taken over by a bailiff, enforcement costs will also be added to the debt.
If repayment of the loan is secured by a pledge of property (mortgage)
- The bank applies to a notary for the issuance of a writ of execution.
- Before issuing the writ of execution, the notary informs the debtor and provides 20 days to repay the debt or submit information substantiating that the creditor's claim is unfounded.
- If the debt is not repaid, the notary issues the writ of execution.
- The writ of execution is transferred to a bailiff for enforcement.
- The bailiff initiates enforcement proceedings, seizes the pledged property and informs the debtor of the amount of the debt and enforcement costs, and sets a deadline for voluntary repayment of the debt.
- If the debt is not repaid within the additional period granted by the bailiff, or no buyer is proposed to purchase the pledged property, a public auction of the property is organized.
Important! It is important to know that voluntarily selling pledged property will usually result in a higher price than selling it through forced enforcement, and a smaller outstanding debt may remain.
If the bank applies to a notary for the issuance of a writ of execution, the amount of the debt will increase due to the additional notary fee and procedural interest. If the matter is subsequently referred to a bailiff for enforcement, the debt will also increase due to the bailiff's enforcement costs.
We encourage you to cooperate with the creditor and look for ways to repay the debt as early as possible. If debt recovery has already been transferred to a bailiff and you have received a notice to comply with the decision, please contact us regarding repayment of the debt before the specified deadline.
The sale of pledged property at a public auction is organized by a bailiff.
Before the auction, you have the right to propose your own buyer. If the price offered by the buyer covers the entire debt and enforcement costs, a public auction can be avoided.
If a buyer cannot be found, the bailiff proceeds as follows:
- determines the market value of the property (an independent property valuer is engaged if necessary);
- announces the first public auction (starting price – 80% of the market value);
- if the first auction is unsuccessful, announces the second public auction (starting price – 60% of the market value).
Information about announced public auctions is available at the Lithuanian public auction website.
What happens after the pledged property is sold?
The proceeds from the sale of the property are used to cover the debt, interest, enforcement costs and other related expenses. The proceeds are distributed by the bailiff.
If the proceeds are sufficient to cover all obligations, the enforcement proceedings are closed – enforcement actions are terminated, seizures of property and bank accounts are lifted, and deductions are stopped.
If the proceeds are insufficient, recovery of the remaining debt continues in accordance with the procedure established by law. You may also contact the creditor to agree on repayment of the remaining debt.
If leasing payments are not made on time, the overdue debt together with interest increases, and contractual penalties (late payment fees) are additionally charged.
The bank informs customers in writing about the outstanding debt and provides an additional 14 calendar days to repay it. Customers are also provided with the contact details of the assigned manager, who should be contacted to find a solution that is suitable for both parties.
If the outstanding debt is not repaid and no agreement is reached on changing the terms and conditions of the leasing agreement, the leasing agreement may be terminated unilaterally.
What happens after the leasing agreement is terminated?
Upon termination of the leasing agreement, the lessee must immediately return the leased asset to the creditor or its authorized representatives. Returning the asset does not in itself cancel the outstanding debt.
After the asset has been returned or repossessed by the creditor, its valuation and sale are organised, and the proceeds are used to cover the debt. Additional costs related to the storage, valuation and sale of the assets are incurred and increase the total amount of the debt.
If the proceeds from the sale of the assets are insufficient to cover the entire debt, the leasing company will require payment of the outstanding amount. If the required amount is not paid within the specified deadline or no agreement is reached on alternative repayment terms, the leasing company will apply to the court for recovery of the remaining debt.
- Once the court decision becomes final, a writ of execution is issued;
- The writ of execution is transferred to a bailiff for enforcement;
- The bailiff initiates enforcement proceedings in accordance with the procedure established by law.
Important! Applying to the court for recovery of the debt increases the amount of the debt due to additionally accrued procedural interest and legal costs. If enforcement of the final court decision is transferred to a bailiff, the obligations will also increase by the amount of enforcement costs.
Once the debt has been fully repaid, the enforcement proceedings are closed. All enforcement actions are terminated: deductions are stopped and seizures of bank accounts and property are lifted.
Important! If the proceeds from the sale of the asset exceed the amount of the debt and the leasing agreement provides for the transfer of ownership of the asset at the end of the agreement, the surplus will be refunded to your bank account after a bilateral agreement has been signed. (We will inform you in writing about the surplus and its refund.)
- The earlier you contact the Bank, the more solutions may be available.
- In many cases, reaching an agreement is financially more beneficial than forced debt recovery.
- Property sold voluntarily is usually sold at a higher price than at a public auction.
- If the creditor changes, the debt remains and must be repaid to the new creditor.
- Cooperate and remain active throughout the entire debt recovery process.
If you have any unanswered questions, you can send us a message via the Internet Bank or call Swedbank on +370 5 268 4422.
