Extended high cost auto financing and credit payment holidays

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Who is entitled to payment holiday and will it affect credit records?

These rules only apply to customers whose financial hardship was caused by the coronavirus pandemic. You will also need to ask for help – payment holidays and payment time extensions will not be automatic.

If you are already experiencing financial hardship for unrelated reasons, you may be offered other forms of “tolerance” (tolerance and help) under existing rules – which could include reducing or waiving interest charges. , or the postponement of payment of arrears.

Companies will not be required to investigate your reasons for requesting a payment holiday or an extension of a payment holiday, although they may decide not to grant you one if it would clearly be against your interests.

If you are already on payment leave, your lender should contact you before the end to see if you can start paying again. However, if you do not ask for an extension or if you do not respond to the lender at all, it may assume that you are able to resume full payments from the next month and report a missed payment to the credit reference. agencies if you don’t pay again that month, so it’s important to make contact.

If you have been granted a payment holiday or reduced payment, this will not result in late payment and default on your credit report. But lenders can often use bank statements or Open Banking data to see that you’ve taken payment leave, and they’re allowed to use that information as part of their credit check process if you’re applying for new credit from. the future.

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