Why Banks Sometimes Deny Loan Deferrals for Military Personnel and How to Secure Your Rights

Loan Payment Deferrals for Military Service Members

According to Главком: Ukrainian law provides military personnel with the right to a temporary suspension of loan payments, including interest, fines, and penalties. However, this financial relief mechanism does not activate automatically. Under Article 14, Clause 15 of Ukraine's 'Law on Social and Legal Protection of Military Personnel and Their Families,' eligibility for this benefit is granted to specific categories defined by the legislation.

Eligibility and Application Procedures

Since 2026, the criteria for granting these deferrals have been clarified. For instance, contract soldiers become eligible only after their first day of participation in combat. The categories entitled to loan payment deferrals include:

• Mobilized personnel;
• Reservists;
• Contract soldiers;
• Their family members.

Mobilized individuals qualify from their conscription date with a military ID or Form 5 certificate. Reservists are eligible for the duration of their duties with an order of enrollment extract, and contract soldiers qualify upon combat participation with a certificate of such involvement (Appendix 6). Family members can apply for the deferral on joint loans or as guarantors by providing a marriage certificate and the service member's military document.

It is important to note that the deferral does not apply or is limited for certain loan types. For example, interest typically continues to accrue on mortgage loans, with few exceptions. For auto loans, the deferral covers only interest payments, and microloans are generally excluded from this benefit.

The application process for a loan deferral involves specific steps. First, gather the required documents, such as a copy of your military ID, mobilization order, or service certificate. Next, submit a formal application to your bank and request a written decision within 7 days. The bank is legally obligated to respond within this timeframe.

If a bank refuses to grant the deferral, there are recommended actions to take. First, insist on receiving a written refusal. Second, file a complaint with the National Bank of Ukraine's hotline at 0 800 505 240. You can also seek assistance from the Free Legal Aid system to prepare a lawsuit.

Loan payment deferrals serve as a crucial tool for providing financial stability to service members and their families, particularly during active military conflict.

Therefore, while loan deferrals are a vital support mechanism for military personnel, securing them requires strict adherence to procedures and a clear understanding of one's legal rights to effectively address potential disputes with financial institutions. These measures are part of broader efforts to protect those serving on the front lines from financial hardship.

As the situation for military personnel evolves, understanding the nuances of financial support becomes crucial. For example, the recent changes in employee reservation processes via the Diia portal highlight how the government is adapting to the needs of critical businesses. To learn more about these updates and their implications for businesses and employees alike, check out this detailed overview on employee reservation procedures.