1.2million credit card and loan payment holidays given to coronavirus-hit Brits – how to apply
ALMOST 1.2million Brits facing money fears due to the coronavirus outbreak have been given payment holidays on credit cards and loans by their lenders.
Trade body UK Finance has revealed that nearly 700,000 people have been given payment holidays on their credit cards for up to three months.
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While a total of 470,000 people have been given a break on paying back their personal loans for the same amount of time.
Lenders have worked with the Financial Conduct Authority (FCA) to also offer 27 million customers the option of interest-free borrowing on the first £500 of their overdrafts.
Any overdraft interest waived by lenders during this period will not have to be repaid at a later date.
Interest will still be charged to personal loan and credit card customers, so make sure you only apply for the holidays if you are facing financial difficulties.
People who have severe financial difficulties should discuss the best options with their lender or reach out to a debt charity for help.
We've explained how to apply for a payment holiday below.
Stephen Jones, chief executive of UK Finance, said: “A payment holiday may not be the right choice for everyone, and lenders have a range of options to help customers through the Covid-19 crisis.
“We would encourage any customers concerned about their financial situation to check with their lender, starting by looking at their website which will have the latest information on the support available.”
How do I apply for a credit card or loan payment holiday?
Most banks are asking people to apply online as they are receiving a high number of phone calls from customers.
Banks are encouraging people not to visit branches due to current social distancing measures in place.
We've compiled a list of the banks that are open and their operating times if you have to visit in person.
Applying for a repayment holiday or an overdraft increase typically require you to complete an online form or login to your online banking.
Loan repayment holidays
Overdrafts
Will a payment holiday affect my credit score?
Where a repayment holiday is agreed as a result of coronavirus, the UK's three credit reference agencies - Equifax, Experian and TransUnion - say it won't impact your credit score as they'll implement an “emergency payment freeze”.
This means it won't be recorded on your file.
It also applies to reduced payments and paused payments, but not to increased credit limits or new borrowing.
The three month break is one of many different options that have been given to people facing financial troubles during the Covid-19 outbreak.
Banks Co-op and Starling are offering up to £50,000 bounce back loans to small business customers.
Self-employed people can also get up to £7,500 from a government grant in less than three weeks’ time.
And the government has created a tool to see if you’re eligible for the loan.