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A payment holiday is a break in payments that lenders may offer their clients when they experience difficulty paying back a loan. No fees or penalties are charged during a payment holiday period, and lenders have the flexibility to configure how interest should be applied after the period ends.
This enhancement extends the payment holiday functionality, previously available for loan products set up with simple interest, to additional configurations including compound interest commonly used with mortgages.
Payment holidays help lenders better serve the needs of their customers by offering more flexibility to help borrowers manage their loan repayments. In some cases, this feature also helps to ensure consistency with market practices and compliance with regulations.
To learn more about payment holidays, visit our support documentation.