The banks will start lending to advance loans for the advance payment of aid for the DANA and insurance claims for those affected by the catastrophe as of this Friday. This was announced by the president of the Official Credit Institute (ICO), Manuel Illueca, on Thursday during an appearance at Moncloa. This system seeks to those affected can access liquidity to start recovering from the shock as soon as possible. Without having to wait for the administrations to resolve their request, something that may take longer than desirable.
Since Friday, the people and companies that have suffered damage can ask for a credit in advantageous conditions to advance aid or compensation that will have a public guarantee of up to 80% of the requested amount. These are ‘soft’ loans in which no monthly payments will have to be made, both in terms of interest and capital.until the claimant receives the insurance benefit or indemnity due to him/her.
When the corresponding administration or the Insurance Compensation Consortium transfers the money, then the banks will proceed to pay the interest on the loan. The credit institutions may not charge opening or repayment commissions for loans granted guaranteed by the ICO. This does not mean that the loans are free. Once the aid has been received, interest will have to be paid to the bank. However, since they are publicly guaranteed, the interest burden will be much lower than that of an ordinary loan.
To apply for advances of aid through this channel, those affected will only need to submit a declaration of responsibility. to the bank in which they certify that they reside or had an employment contract in the affected areas and also the damage they have suffered. It will be sufficient for them to submit an application for public aid or a request for compensation to the insurance consortium for the damaged property.
With this system there is also a risk for the applicants. It could happen that the administration decides not to grant the aid or that it is of a lower amount than expected, as with insurance indemnities. In such cases, the system designed by the ICO converts the requested advance into a loan. to be repaid over a period of five years. Likewise, with more favorable conditions than those of an ordinary loan.
In any case, it is important to remember that the public aid granted by the central government for damaged housing or household goods has a system of advances of 50% of its own of the amount without the need to request a loan. These two systems are not incompatible; on the contrary, they are complementary.
“Today, we will finish closing the pending issues with the banks and from tomorrow the loans will be available to families and companies”, explained Illueca in his speech to the media. In addition, the president of the ICO has pointed out that loans that have been granted previously, but that meet the eligibility conditions of the ICO will also be eligible for the scheme. of public guarantees.