Debt extension is not automatic. Special checks and credit cards will not have payment extended. See how it works.

Individual customers or micro and small companies of the five largest banks in the country are able to request an extension of up to 60 days on debt maturities. The provision does not apply to special checks and credit cards. Debt renegotiation was authorized by the National Monetary Council (CMN).

The council facilitated the renegotiation of credit operations for companies and families that have excellent financial capacity and maintain active regular and compliant operations, allowing adjustments to their cash flows. The measure exempts banks from increasing provisioning (reserve of value) in the event of renegotiation of credit operations carried out in the next six months.

According to the Central Bank (BC), it is estimated that almost R$3,2 trillion in credits could benefit from this measure, “the renegotiation of which will naturally depend on the interest and convenience of the parties involved.”

Banks

Banco do Brasil, Bradesco, Caixa Econômica Federal, Itaú Unibanco and Santander will extend debts for contracts in force and limited to the principles already used. The measure to stimulate the economy is intended to mitigate the negative effects of the coronavirus on employment and income, reported the Brazilian Federation of Banks (Febraban).

The economist at the Brazilian Institute for Consumer Protection (Idec), Ione Amorim, highlights that it is necessary to be aware, when renegotiating, whether the bank is proposing a pause in the contract, without charging interest for the period of suspension. “It really pays off if there is a break in these contracts and the consumer does not have to pay interest due to this suspension. Charging adjustment interest would be abusive, given the conditions under which these attitudes are being adopted at this time,” she said.

When making the request, it is also necessary to confirm with the bank that there will be no accumulation of installments, after 60 days, with those that are due. Another suggestion from the economist is to state whether there will be no change in the customer's credit score when requesting the suspension of the contract.

The economist even states that the measure should also involve special checks and credit cards. “There are two modalities in which consumers already have a history of debt, especially low-income individuals. From this aspect, the measure ends up being insufficient,” she said.

Questions and answers

The Brazilian Federation of Banks (Febraban) published a list of questions and answers to answer questions about the measure. Check out:

How do I request an extension of a debt I have with my bank?

Individual and micro and small business customers need to contact their bank, explain their case to find out the conditions for extending the debt for up to 60 days. The measure applies to contracts that are in force, with payments on time. Each institution will define the time and conditions for new payments.

Is debt extension automatic?

No. Initially, the customer needs to contact the bank to renegotiate the time, which can be extended for up to 60 days.

Which banks does the provision apply to?

The measure applies to Banco do Brasil, Bradesco, Caixa, Itaú Unibanco and Santander.

What types of debts does it apply to?

It applies to all credit agreements made by the customer with the bank. It does not extend to credit card and overdraft debts. For more information, the customer needs to contact their bank.

Does the provision apply to usage bills?

No, the measure does not include bills for general use – water, electricity, telephone – and taxes, as they refer to services provided by public service concessionaires and governments.

After renegotiating a debt on a credit I have with the bank, can the institution charge me interest?

Each bank will establish its procedure, and each case will be assessed individually.

 

Contact your bank and request your extension.