The payment holidays for loans, credit cards, car finance and payday loans are set to be extended when England goes through a second national lockdown.
Borrowers who haven’t paused payments since July can apply to their lender for one. The term is up to six months.
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The payment holidays can also be used for rental agreements, buy-now-pay-later systems and pawnbrokers.
In March, the regulator asked lenders to suspend payments for three months for customers whose finances had been negatively impacted by the coronavirus crisis.
In July, the Financial Conduct Authority (FCA) extended these breaks, which should end on Saturday, October 31st.
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But over the weekend the Prime Minister announced that England would be locked for a month from Thursday.
The FCA said it will continue to review its support for consumers as the Covid-19 pandemic evolves.
Work is underway to implement the new systems and customers are encouraged not to contact their lenders yet.
The city guard added that the lenders will make the information available to borrowers as soon as it becomes available and the plans are confirmed.
Credit reference agencies agreed that the first round of payment interruptions would not affect customers’ creditworthiness.
It is unclear whether this last support will be recorded in credit files upon acceptance.
Customers who have already had a payment suspension but are still having issues are advised to speak to their lender.
For those who have problems from November onwards, additional help is still available, but it is tailored to the individual circumstances.
These measures include waiver of debt interest and fees, but these will be noted in their credit history.
While it’s better than missing out on a payment without speaking to your lender first, Martin Lewis previously warned that you should only request a vacation when you really need it.
Borrowers will continue to receive interest throughout the hiatus, which will cost them more in the long run as the balance will be higher than if they continued to make repayments.
For example, if someone pays £ 600 per month on a mortgage with a remaining term of 12 years takes a three month vacation, they will typically have to repay the remaining amount over 11 years and nine months at an interest rate of £ 616 per month.
He said, “So unless you really need a three month vacation, don’t or take a shorter break or make voluntary repayments if you can.
“However, if you are having problems apply now and get the help you need. And since the deadline is running out, my standard “only needs to take” the addition of “when you need it or think you really need it soon”. as future aid diminishes and this payment vacation is best than the one that will be available after October 31st. ”
MSE previously warned that taking a break in payments could prevent you from taking out a mortgage, although it will not affect your creditworthiness.
They said that then lenders can see if you’ve paused payments through other methods like open banking. They can then use this information to decide whether or not to give you credit.
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