Payment holidays for those with various types of credit were originally scheduled to end on Oct. 31, but those struggling to pay may soon be able to request a deferral of up to six months, the Financial Conduct Authority (FCA ). It comes after the government announced on Saturday that the mortgage payment holidays will also be extended – more details on that are expected later today.
For all our guides on the financial fallout of the pandemic, see our Help on the coronavirus section.
What does the FCA offer?
When you take a payment holiday, that means you stop paying back what you’ve borrowed for now, although you’ll still have to pay back what you owe later, and interest usually accumulates even if you don’t. .
The FCA announced today that it will propose changes to its temporary guidelines on personal loans, credit cards, auto financing, leasing with an option to buy, buy it now and pawn shops. As part of its proposals to support people financially affected by the coronavirus:
- Borrowers who have not yet had a payment holiday can request one. This can last up to six months.
- Borrowers who are currently on their first payment holiday can request a second.
For high-cost, short-term credits (like payday loans), borrowers might ask for a one-month deferral if they haven’t already had one.
The regulator says it is working with commercial organizations and lenders on how to implement these proposals as quickly as possible. But since these are technically still proposals at this stage, you should not contact your lender until they have been confirmed.