Watchdog extends loan payment holidays ahead of second lockdown
The UK’s financial watchdog will extend payment holidays on credit cards, car finance, personal loans and pawnbroking ahead of a second coronavirus lockdown in England.
The Financial Conduct Authority (FCA) said that consumers who had not yet had a payment deferral under guidance issued in July would be able to request a payment holiday lasting up to six months.
Borrowers who have already had one payment deferral would be able to apply for a second, the regulator said.
On Saturday Prime Minister Boris Johnson announced a month-long lockdown in England to contain a second wave of Covid-19 infections. The restrictions, which are due to come into force on Thursday, are set to last until 2 December.
“Borrowers should only take up this support if they need it,” the FCA said in a statement. “It is important that consumer credit customers who can afford to do so continue to make repayments.”
Consumers with high-cost short-term credit products such as payment loans could apply for a one-month payment holiday if they have not already had one, the watchdog 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,” the FCA said.
The watchdog said customers should not contact their lenders about a repayment holiday yet, as lenders will issue guidance soon on what the measures mean for their customers and how to apply for deferrals.
The FCA said on Saturday it would propose further relief to help mortgage borrowers and would make a statement today.