People struggling to pay credit card payments, loans, car finance payments and payday loans will be given extra time to pay their bills due to the second lockdown.
A payment holiday will also be available to borrowers in England who haven’t already taken one since July, and it will last for up to six months.
Who will be eligible?
Financial regulator, The Financial Conduct Authority (FCA) proposed the extension of support for borrowers after the government confirmed the nationwide lockdown in England.
The payment holidays were first announced in March and were due to end on October 31, with banks agreeing to offer ‘tailored support’ to borrowers who needed it thereafter.
Arranging a payment holiday means your account won’t fall into arrears, with firms being halted on reporting missing payments on credit reports.
The new proposals would mean:
Those who haven't had a payment holiday will be eligible for two payment deferrals of up to six months in totalThose who've already had one payment holiday will be eligible for a further payment deferral of up to three monthsHigh-cost short-term credit customers, such as those with payday loans, who haven't yet had a payment holiday will be able to pause repayments for one monthIf you've already had two payment holidays, you should contact your lender for tailored support
Borrowers will now have until 31 January 2021 to request an initial payment deferral.
Those with high-cost, short-term credit loans who have not yet had a payment holiday will also be eligible for a deferral on payment of up to one month.
What if I have already taken a payment holiday?
If you have already taken a payment holiday you will not need to worry about paying it back straight away.
In the proposals, the FCA says firms shouldn’t report those in receipt of a payment holiday up until 31 January 2021 as having missed a payment on their credit record.
Those who have already had two payment holidays will not be eligible for any additional payment deferrals under the new proposals.