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Suspected Policy in English

"Stop-Pay Suspension Policy"

"Loan Forbearance and Suspension Policy"

Description of the Policy in English

The "Stop-Pay Suspension Policy" or "Loan Forbearance and Suspension Policy" is a policy implemented by the Chinese government to address the issue of mounting non-performing loans (NPLs) in the country's internet lending sector. The policy was first introduced in 2018 and has since been updated and refined several times.

Under the policy, qualified borrowers with internet loans may be eligible for a suspension of principal and interest payments for a period of time, typically up to six months. To qualify for the suspension, borrowers must meet certain criteria, such as having a good credit history and facing financial hardship due to unforeseen circumstances. During the suspension period, borrowers are not required to make any payments on their internet loans, and the interest on those loans is suspended. However, borrowers are still responsible for paying any fees or other charges that may apply to their loans.

The purpose of the "Stop-Pay Suspension Policy" is to provide borrowers with temporary relief from their payment obligations, allowing them to recover financially and get back on track with their loan repayments. The policy is also intended to help reduce the risk of NPLs in the internet lending sector and to promote the stability of the financial system.

Eligibility Criteria in English

To be eligible for the "Stop-Pay Suspension Policy," borrowers must meet the following criteria:

Have a good credit history

Be facing financial hardship due to unforeseen circumstances

Have been a customer of the lending institution for at least six months

Have an outstanding loan balance of less than RMB 500,000

Application Process in English

To apply for the "Stop-Pay Suspension Policy," borrowers must contact their lending institution and submit an application. The application will typically require the borrower to provide documentation of their financial hardship, such as a pay stub or bank statement. The lending institution will review the application and make a decision on whether or not to grant the suspension.

Benefits of the Policy in English

The "Stop-Pay Suspension Policy" can provide borrowers with a number of benefits, including:

Temporary relief from their payment obligations

Time to recover financially and get back on track with their loan repayments

Reduced risk of default and foreclosure

Improved credit score

Risks of the Policy in English

While the "Stop-Pay Suspension Policy" can be beneficial for borrowers, there are also some risks associated with the policy, including:

Increased interest charges over the long term

Damage to the borrower's credit score if they fail to make payments after the suspension period

Potential for abuse by borrowers who do not actually need the suspension