The financial watchdog is proposing to extend payment deferrals for credit and loan customers by six months.
The Financial Conduct Authority (FCA) has said it will offer updates to its temporary guidelines offering support for personal loans, credit cards, auto financing, leasing with the option to buy, buy now, pay later, pawn and short term at high cost. credit customers who continue to be financially impacted by the coronavirus.
Following the government’s announcement of a second confinement for England, the FCA proposed that for those who have not yet requested a deferral of payment under its July guidelines, they could request one.
This could take up to six months, unless it is “obviously not in the best interests of the client,” he said.
For those who are already deferred, they could request a second leave.
Consumer credit customers who have already benefited from payment deferrals and still encounter payment difficulties should contact their lender to arrange tailor-made support.
For high-cost, short-term loans (like payday loans), clients might request a one-month deferral if they haven’t already had one.
However, the FCA warned that for credit customers who could afford to repay, they should continue to do so.
He added that he would work with commercial organizations and lenders to implement the proposals as quickly as possible and make another announcement in due course.
In the meantime, consumer credit customers should not yet contact their lender. Lenders will soon provide information on what this means for their clients and how to apply for this support if the FCA’s proposals are upheld.
Mortgage payment holiday
Rules allowing borrowers in financial difficulty due to the coronavirus crisis to take mortgage payment leave will be extended for another six months, the FCA also announced.
This means that borrowers who have not yet taken a payment holiday but need it, will be able to do so for up to six months.
And those who have taken a three-month leave will be able to take another.
However, borrowers who have already used a full six-month payment holiday should seek help from their lender.
Customers are urged not to contact their lenders at this time.
The regulator will publish a consultation on the updated guidelines today, which will further clarify the details.