Payment holidays for credit cards, car finance, personal loans and pawned goods have been extended for a further six months ahead of tougher coronavirus (COVID-19) restrictions.
The extension was announced this morning by The Financial Conduct Authority (FCA).
Customers who had not yet deferred a payment can now request one for up to six months, and those with short-term credit – such as payday loans – can defer for one month, with the FCA saying: “It is important that consumer credit customers who can afford to do so continue to make repayments,”
It continued: “Borrowers should only take up this support if they need it.”
The FCA had already brought in payment holidays for credit customers in April and extended them for three months in July, but it has now reviewed the rules – which apply across the UK – once again amid fears the introduction of the second national lockdown will hit many more people’s finances.
The payment holidays will also apply to those with rent to own, and buy-now pay-later deals.
Anyone already benefitting from a payment deferral will additionally be able to apply for a second deferral, however the FCA did not comment at this time on whether people could still have interest on the first £500 of their overdrafts waived, and said it would make a fuller statement in due course.
The FCA said: “We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,”
This comes following the announcement yesterday that mortgage payment holidays are also being extended for homeowners that have been financially affected by the pandemic, and borrowers who have not yet had a mortgage holiday can request from their lender a pause in repayments, that can last up to six months.
Those who have had their payments deferred already, can extend their mortgage holiday until they reach the six-month limit.
During this period interest will still accrue on what borrowers owe.
Borrowers who have already reached the maximum six-month mortgage holiday and are still facing difficulty making repayments, are being advised by the FCA to speak to their lender about a “tailored support” plan.
You can find more information via The Financial Conduct Authority (FCA) website here.