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This page was last updated on 2 April 2020.

We'll continue to update this page as the situation develops.

What help is available from creditors?

Not all creditors have announced what they're planning to do for their customers if their finances are affected by coronavirus. However, you should contact your creditors to discuss your finances as soon as possible if your situation changes. They may be able to help.

Most creditors are willing to be flexible and supportive to anyone who's affected by coronavirus, to try and prevent them falling into financial difficulty. It's important that you get in touch with them as you can.

Update: new guidance from the Financial Conduct Authority (FCA)

The FCA has announced plans to order banks to offer further support to those with overdrafts, loans and credit cards.

This support includes:

  • Interest-free overdrafts of up to £500 for up to three months
  • Payment holidays on loans, credit cards, store cards and catalogue accounts for up to three months
  • Changes to the new overdraft rules introducing a flat rate of interest on all overdrafts to make sure nobody is worse off as a result of the changes
  • Ensuring customer credit ratings won’t be affected if they use a payment holiday or an interest-free overdraft

If the proposals are approved, they will come into force on 9 April.

Your creditors may be able to:

  • Reduce or delay your mortgage payments - Some creditors are offering to reduce or delay mortgage repayments for two or three months for people who are impacted by the virus and currently up-to-date with their payments. Please also be aware that although no mortgage payment will be due in that time, interest will still be accrued and added to your mortgage balance
  • Reduce or delay your unsecured loan repayments - Some creditors are offering to reduce or delay loan repayments for two or three months for anyone impacted by the virus
  • Allow you to access your savings early - Some creditors have confirmed they are giving customers free early access to their fixed rate savings accounts, dropping the fees that would normally be charged
  • Offer you more credit - Some creditors may be willing to increase credit card and overdraft limits to help support customers who are struggling with their finances. However, it's important to consider the longer term impact this could have on your credit file. Please note that if you’re on a debt solution, taking out extra credit could go against the terms of your agreement. Always speak to your debt solution provider before considering this as an option
  • Reduce or pause your energy bills - This depends on your situation, so please contact your provider to discuss your options
  • Reassess your energy arrears - This also depends on your situation, so please contact your provider to discuss your options

Who can apply for a mortgage holiday during the coronavirus crisis?

Mortgage holidays have been put in place for anyone who's struggling financially. You won't need to 'prove' that coronavirus has impacted your finances, but you'll need to be up to date with your mortgage payments up to this point. Also, lenders can only grant a mortgage holiday if it's not likely to make paying your mortgage more difficult in the future.

If you're already struggling financially or have accrued arrears on your mortgage, your lender will look into other options. In any case, it's best to talk to them and see how they can help.

When will I have to repay any deferred mortgage payments?

If you take a mortgage holiday, each bank will have a different approach to how they'll expect you to repay the deferred payments. Generally, you'll be able to either:

  • Increase your future monthly payments so you can chip away at the deferred payments, or 
  • Increase the term of your mortgage

While increasing your monthly payments tends to be the default, your mortgage lender will ultimately decide how repayments will work.

How do I deal with persistent debt during the coronavirus crisis?

If you have a persistent debt that your credit provider's told you to increase your payments on, the Financial Conduct Authority has relaxed these rules for the time being. The deadline for customers to respond to persistent debt letters has been extended until 1 October 2020. They've also been given more time to increase payments on any persistent debt.

How will taking a payment break affect my credit file?

Credit reference agencies have confirmed that taking a payment break won’t affect your credit file if you’re currently up to date with your repayments to a mortgage or a loan.

However, if you’re currently in arrears on a mortgage or a loan, you’ll need to speak to your lender to find out how they’ll report any payment break to your credit file. Your credit rating may be affected, which could make it harder to remortgage or borrow more money in future.

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