Terms and Conditions
Short-term Payment Deferral
You may be eligible to defer monthly payments on your current RBC installment loan, auto loan, or mortgage. If you have an installment loan, auto loan, or mortgage which was in good standing on February 29, 2020, whether or not you are currently participating in our automatic three (3) month COVID-19 deferral programme, you are likely eligible for this additional opt-in deferral programme for those accounts.
How does a deferral help you?
Payment deferrals may provide you with additional financial flexibility by deferring regular monthly payments on your RBC installment loan, auto loan, or mortgage, for up to three (3) months. This should provide you with an increased monthly cash-flow to help manage other necessary expenses.
What is the impact on your debt?
When you defer payments, it does not eliminate this amount of your debt. Because payments are not being made as originally scheduled, the term of your loan or mortgage is, at a minimum, extended by at least the same number of months as the deferral period, and in certain instances, can significantly extend the term to a period longer than the number of months the deferral is sought.
Can you catch up later?
Yes, if you are looking to minimize the impact of the deferral on your maturity dates and want to explore options to remediate, please call our Advice Centre or speak to your banking representative to find out which options might be available to you.
If you do not wish to do so, or your new budget cannot support this, you can continue to pay off the debt on the new schedule with your regular monthly payments; essentially you will continue making payments beyond the end of the original loan or mortgage term until the debt is paid off.
Important Terms and Conditions about Deferrals
We want to ensure you understand how deferrals work. Here are the key things to know:
Definitions
“you”, “your”, “I” and “my”, it means the Eligible RBC client to whom a Loan is granted and includes any co-borrowers and/or guarantors of such facilities.
“RBC” means the affiliated Royal Bank of Canada company or branch which has granted you a Loan.
“Consent” means this document and all the terms and conditions included which vary the terms of the original Loan.
“Deferral Period” means the specified number of months requested by you under the Programme, which shall not in any case, extend beyond September 30, 2020. This may, where applicable, include the automatic payment deferral between March 1, 2020 and June 30, 2020.
“Eligible” means any RBC client who is a borrower with installment facilities and is current and in good standing as of February 29, 2020 and not already participating in RBC relief programmes for other circumstances.
“Loan” means any installment loan, mortgage, auto loan and any other personal installment facility RBC has granted to you.
“Programme” means the optional payment deferral programme to Eligible clients and where applicable, the automatic payment deferral which was applied between March 1, 2020 and June 30, 2020
- Deferral is optional and is not automatic.
- You must meet certain criteria to be Eligible, for example, your payments must not have been in arrears as of February 29, 2020.
- If you participated in the initial automatic RBC COVID-19 Deferral Programme, you may be Eligible to defer additional payments.
- Deferrals in this Programme will end on or before September 30, 2020.
- Your regular payments start again after the agreed number of deferred payments, e.g. if you defer three monthly payments, your regular payments should start again on your usual payment date in the fourth month.
- During the Deferral Period, interest will continue to accrue on the full principal balance of the Loan. When you restart your regular payment, you pay off the additional interest accrued for the deferral period first. Any residual amounts from the regular payment is next applied to principal reduction. In the event that the interest accrued during the Deferral Period is greater than the regular payment, the residual interest amount is either:
- capitalized i.e. is added to the outstanding principal. The principal / interest split in your regular Loan payment resumes the following month.*
- taken from future Loan payments as payments will be applied to interest first. The principal / interest split in your regular Loan payment will resume only after interest accrued during the Deferral Period is fully settled.**
*For accounts in Trinidad and Tobago, Aruba, Bonaire, Curacao, Saba, St. Maarten and some accounts in the Eastern Caribbean
** For accounts in The Bahamas, Turks and Caicos Islands, Cayman Islands, Barbados and some accounts in the Eastern Caribbean
- Your overall cost of borrowing over the life of the Loan can considerably increase depending on the outstanding balance of your Loan at deferral and the number of years left in the Term of your Loan. In certain cases, you will see an extension in the Term of your Loan beyond the period of payment deferral availed, i.e. if you sought a payment deferral for 6 months, then in certain cases the maturity date of the loan could be extended by more than 6 months.
In order to assist you in understanding this impact and making an informed decision about the deferral, the following illustrations show how the deferral can extend your Term.
The table below captures impact of seeking payment deferral of 6 months on Instalment loans with an Interest Rate of 10% and remaining payment term of 5 years. The scenarios below capture varying Installment Loan Amounts, Life Left to End of Loan Term at Deferral and corresponding impact on Term.
Outstanding Principal Amount Regular Payment Amount (blended principal and interest) Remaining Life left to end of Loan Term Impact on Loan Term $30,000
$637.41
1 year
Extended by 6 additional months
4 years
Extended by 9 additional months
$70,000
$1,487.29
1 year
Extended by 7 additional months
4 years
Extended by 9 additional months
$100,000
$2,124.70
1 year
Extended by 7 additional months
4 years
Extended by 9 additional months
The following table captures impact of seeking payment deferral of 6 months on Mortgages with an Interest Rate of 5% and remaining payment term of 25 years. The scenarios below capture varying Loan Amounts, Life Left to End of Mortgage Term at Deferral and corresponding impact on Term.
Outstanding Principal Amount Regular Payment Amount (blended principal and interest) Remaining Life left to end of Loan Term Impact on Loan Term $100,000
$584.59
5 years
Extended by 8 additional months
20 years
Extended by 17 additional months
$500,000
$2,922.95
5 years
Extended by 8 additional months
20 years
Extended by 17 additional months
$1,000,000
$5,845.90
5 years
Extended by 8 additional months
20 years
Extended by 17 additional months
These examples are intended for illustrative purposes only to demonstrate how deferrals can impact the term of the installment loan or mortgage. It is not to be relied upon as constituting legal, financial or other professional advice for your specific situation. - All other terms, conditions, agreements and collateral related to the original Loan with RBC remain in effect. Agreeing to deferred payment arrangements does not replace or cancel the original commitment.
- If you request a payment deferral, you also agree to provide any additional documentation or collateral required by RBC to ensure the security of the original Loan. You also agree to sign any additional documentation and to pay all legal fees and other expenses (including but not limited to stamp duty, value added tax and recording fees).
- When you submit a deferral request through your RBC online banking account, you consent to any collection, use, disclosure and storage of your personal information necessary to facilitate your request. RBC’s use of this information will be strictly within the guidelines of our privacy policy.
By applying to defer your payments, you are indicating that you accept and understand the impact and obligations of this arrangement, specifically:
- You have read and understood the terms and conditions of deferring your payments and understand that they apply to deferrals commencing from March 1, 2020. You understand the impact this decision has - on both term and interest - of your original RBC Loan.
- You have had the opportunity to ask questions about anything you did not understand and received answers that clarified the deferral arrangement for you.
- If you are deferring payments on your RBC mortgage, you understand you will receive an updated amortization schedule.
- You certify that all borrowers (if more than one) or guarantors (if any) have agreed to the terms of this Consent and in the event of any dispute by other borrowers or guarantors, you shall be liable for the disputed amounts and shall indemnify RBC against any and all such claims. Further, you agree to indemnify RBC against all matters and expenses arising out of your participation in the Programme and release and discharge RBC and its successors and assigns, from any and all liability arising out of any dispute that you have or may have or in the future related to the Programme.
- This Consent may be executed in any number of counterparts by the parties hereto, each of which counterparts when so executed shall be an original, but all the counterparts shall together constitute on the same agreement. Delivery of an executed counterpart of a signature page to this amendment by electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.