all you need to know


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money in hard times

More than 2.5 million people have been able to take advantage of their payment holiday. mortgage, but from April 1, 2021, you will no longer be able to request this assistance from your bank or your mortgage company; although you can always ask your bank for help if you need it.

If you applied before March 31, this assistance will end on July 31, 2021.

Mortgage payment holidays

If your income has gone down and you think you will benefit from it, you may still be able, under certain circumstances, to obtain mortgage leave.

You will need to discuss this with your lender, who will assess your situation to see if you can afford mortgage leave or even reduced payments.

the Financial conduct authority (FCA) stressed, however, that people should only request payment leave if they really need it.

Automobile financing

Consumers can expect to be able to freeze their payments for six months and the interest owed will accrue.

Auto companies have been urged not to repossess the cars during this difficult time. If a customer is approaching the end of their finance contract and is unable to pay the final payment amount, then the supplier should try to come up with a solution that allows the buyer to keep the car.

Payday loans

If you have taken out a personal loan, you will only be able to suspend payments for one month. After the month-long payment holiday, payday loan providers should offer customers an affordable repayment plan, which could include a number of smaller payments.

Rent-to-own, buy-it-now and late payment and pawnshop

Again, these providers are advised to consider offering a three month payment freeze and interest should be accrued or even waived if possible.

If someone is in the middle of a buy-it-now agreement, it should be extended for the duration of the payment freeze.

If someone has an item purchased under an option to buy lease, it should not be taken back. If an item were to be picked up but is not due to social distancing, the customer should not face additional charges.

Pawn shops are required to extend the repayment period. If it has already ended, they should not serve a notice of sale for an item for at least three months. If notice has been served, it should be suspended.

Protect your credit score

When you need to start payments in July, it’s important not to miss payments to avoid damaging your credit score.
“Becoming in arrears with not paying your credit card, loan or mortgage for even a month can lower your credit score by up to 33 points. A default or non-payment for three consecutive months is likely to trigger a dramatic drop in your credit score and result in a black mark being added to your file. These black marks make accessing credit nearly impossible, with negative scores appearing on your credit report for up to six years, ”warns Justin Basini, CEO and co-founder of ClearScore.

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