Buyouts, renegotiation, bridging loans · Comparison
Adjusting, deferring or suspending instalments: getting through a difficult period without changing your loan
Adjusting, deferring or suspending instalments: what each clause really costs, the condition raised against you, and the written confirmation to get.
Adjusting varies the amount of the instalment within the limits of the contract; deferring moves one or more instalments to the end of the loan; suspending the entire repayment is a commercial gesture or a grace period granted by a judge. None of them erases a sum due: each displaces a liability that generates interest. These clauses most often require you to be up to date: the request must be made before the first missed payment.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- Adjusting, deferring, suspending: three distinct mechanisms, each with its own trigger, cost and conditions.
- None of them erases a sum due: each displaces a liability in time, and this displacement always generates interest.
- Partial deferral suspends only the capital; total deferral also suspends the interest, which is added to the capital and generates further interest.
- Total suspension is generally not a clause in the contract: it is a commercial gesture or a court decision.
- The most commonly raised condition: being up to date with your instalments. Flexibility must therefore be activated before the first missed payment.
Modulating, deferring or suspending your instalments allows you to get through a difficult period without changing your loan. Nothing is erased: the burden is shifted, and it generates interest. This is the lightest route for restructuring an existing loan; to change the interest rate, see renegotiation and refinancing.
The three clauses compared at a glance
| Modulation | Deferral of instalment | Suspension | |
|---|---|---|---|
| What changes | The amount of the instalment | One or more instalments, postponed | The entire repayment |
| What remains due | Everything, redistributed differently | Everything, plus the interest for the period | Everything, plus the interest for the period |
| Usual effect | On the term, or on the number of instalments | On the term | On the term |
| Source | A clause in the contract | A clause in the contract | Rarely a clause: a commercial gesture, or a court decision |
| Cost | Interest, if the instalment decreases | Interest, always | Interest, always, and sometimes amendment fees |
| Where to find it | General terms, “modularity” article | General terms, “deferral” article | Nowhere, and that is the problem |
Modulation: adjusting the instalment to your income
Varying the instalment within the limits of the contract. An increase shortens the loan and reduces the cost; a decrease extends it and increases the cost.
Read the boundaries: amplitude, grace period, periodicity, maximum extension, and the obligation to be up to date.
An increase may be treated as a partial early repayment, with compensation: your clause states this.
Assiette de ce premier plafond : le capital remboursé, au taux moyen du prêt.
- En vigueur depuis le
- Source
- Article R. 313-25 du code de la consommation — Légifrance
Assiette différente de la précédente : le capital restant dû avant le remboursement. Les deux assiettes figurent dans la même phrase de l'article R. 313-25 du code de la consommation, et on les intervertit souvent.
- En vigueur depuis le
- Source
- Article R. 313-25 du code de la consommation — Légifrance
The regime: early repayment.
Deferral of instalments: partial or total, a significant difference in cost
A partial deferral suspends the capital: you still pay interest and insurance. A total deferral also suspends the interest, which itself generates interest: it costs significantly more.
- The insurance remains due, even in the case of a total deferral.
- The number of deferrals is capped over the entire term.
- Request it before the missed payment, not after.
'Putting on pause': commercial gesture or court decision
Rarely a clause: either an amendment negotiated with your bank, or a grace period granted by a judge. Only the latter is binding on the lender.
The judicial route is a mechanism for difficulty: prepare it with a consumer association, the ADIL or a lawyer.
Tolérance ouverte lorsque la remise du bien intervient après l'octroi du crédit — construction, vente en l'état futur d'achèvement, travaux. Elle ne dit rien de ce qu'un emprunteur peut demander en cours de vie du prêt.
- En vigueur depuis le
- Source
- Décision D-HCSF-2021-7, art. 1er — Légifrance
Clause or amendment: what changes for your rights
A pre-provided clause gives a new schedule, without delay. A modification of the contract goes through an amendment, with a reflection period.
L'avenant doit comprendre un échéancier détaillant, pour chaque échéance, le capital restant dû en cas de remboursement anticipé, ainsi que le taux annuel effectif global et le coût du crédit calculés « sur la base des seuls échéances et frais à venir » — la formule est citée telle que l'article L. 313-39 l'écrit. Le délai court à compter de la réception de ces informations.
- En vigueur depuis le
- Source
- Article L. 313-39 du code de la consommation — Légifrance
Do not compare its annual percentage rate of charge to that of your loan offer.
Act on flexibility before the first missed payment
The clauses require you to be up to date. They close at the first rejected direct debit: act at the first signs.
Other refusals: the grace period has not elapsed, the quota has been exhausted, the loan is excluded (a bridge loan cannot be adjusted). A refusal contrary to the contract can be contested: complaints and mediation (FR).
The effect on the term: the true limit is in the contract
La maturité est la durée initiale du crédit : la somme de la période de différé et de la période d'amortissement. C'est un critère d'octroi, qui s'apprécie au moment où le crédit est accordé.
- En vigueur depuis le
- Source
- Décision D-HCSF-2021-7, art. 1er — Légifrance
This cap applies at the point of granting. A significant extension nevertheless hinders a buyout or a loan transfer.
A reduction in instalments leaves a higher outstanding capital at the time of resale. Compare the amortisation schedules before and after.
The right clause for each situation
| Your situation | The adapted mechanism | What to check first |
|---|---|---|
| A lasting decrease in income | Downward adjustment | The extension cap, and what happens to the outstanding capital |
| An exceptional expense over one or two months | Partial deferral of instalments | The number of deferrable instalments remaining, and the status of the insurance |
| A period without income, known in advance | Deferral, requested before the period | The grace period, and the condition of being up to date |
| A lasting increase in income | Upward adjustment | The classification as a partial early repayment |
| A rate that has become unfavourable | Neither: renegotiation or buyout | The complete calculation, including penalty and fees |
| Missed payments already incurred | None of the three: restructuring or grace period | Support from a third party, before any letter |
What to re-read in your loan offer, before you need it
Amplitude, waiting period, extension cap, effect of a rate rise, type of deferral, number of deferrals, amendment fees. See reading your loan offer and, if not available, the European Standardised Information Sheet.
A hurdle to overcome? Create your file or weigh the options by telephone.
Sources
Read next
- Mortgage rates in Lyon: current rates by loan term
- Renegotiating your mortgage or having it refinanced: the calculation that tells you whether it is worthwhile Renegotiating or refinancing your mortgage is only worthwhile if the interest saved exceeds all costs. The method in six lines, and when to abstain.
- Repaying your mortgage early: paying the compensation fairly Repaying early is a right. The compensation is due only if the contract provides it, capped at the lower of two calculations. The exempt cases.
- Understanding your loan offer: the twelve clauses to check before signing The twelve clauses of the loan offer, in the order of the document: what is negotiable, what the law caps, and the three points that cannot be rectified.
- Transferring your mortgage to another property and keeping your rate Keeping your rate when moving: where to find the transferability clause in your loan offer, its conditions, and the solutions when it is missing.
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