It’s a worrying time and whilst health is the primary concern financial issues are also important. Many people are worried about paying their bills, to help we have put together a series of hints and tips.
PART 2 – LOANS, CREDIT CARDS, CAR FINANCE & OVERDRAFTS
HELP LOANS WITH LOANS AND CREDIT CARDS
Financial Conduct Authority (FCA), which regulates the lending industry, has confirmed that high-street credit card and loan providers must offer payment holidays where customers are struggling to pay. Lenders should give three-month payment holidays to card and loan customers whose finances are affected by coronavirus, so your lender needs to help you when you ask.
You have until 14 July to request a payment holiday. If it’s granted, you won’t need to pay anything towards your loan or credit card for up to three months from the date it’s granted. Most lenders are not asking for proof that finances have been affected by coronavirus. You will still be charged interest during the payment holiday. This means you are likely to end up paying slightly more overall. If you can continue to meet your payments it is best to keep doing so. Lenders only need to agree a payment holiday where it is a suitable solution. If you already have debt problems, or there’s a chance your income will not recover after the coronavirus crisis is over, then the lender does not have to agree a payment holiday. In these circumstances they should work with you to find a more suitable solution, such as directing you to debt help, setting up a longer-term repayment plan or waiving interest and charges. While the FCA has told banks they must as a minimum offer payment holidays, some are also waiving fees for missed payments, offering reduced monthly payments or emergency credit limit increases so check what your lender is offering.
HELP WITH CAR FINANCE
Many major car finance lenders are offering payment deferrals, reduced payments, payment extensions and payment holidays, but you will need to contact your provider directly and they will help on a case-by-case basis. The Financial Conduct Authority which also regulates car finance has confirmed it will make an announcement about what help the car finance industry must offer customers. We will provide an update when this information is available.
HELP WITH OVERDRAFTS
Banks must offer up to £500 interest free overdrafts for three months to help those struggling. If you are struggling financially due to coronavirus or think you will struggle in future you can ask your bank to make the first £500 of your overdraft interest-free for at least three months. Many banks are offering this to all overdrawn customers and there is no need to request it. You should check if your Bank is offering an interest free period automatically or if you need to apply. Some banks are going beyond the FCA’s minimum standards your banks web site should provide details.
