Loans as well as bank card holidays to be extended for six weeks amid next lockdown.
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Millions of struggling households will be able to apply for additional support on the loans of theirs and debt repayments as a result latest coronavirus lockdown measures, the Financial Conduct Authority has announced.
This will include transaction breaks on loans, credit cards, automobile finance, rent to own, buy now pay-later, pawnbroking and high-cost short-term credit, the regulator said.
In a statement on Monday, the FCA said it’s in talks to extend steps to allow for those who will be influenced by newest restrictions.
It’ll be followed by new measures for anyone struggling to go on with mortgage repayments later on Monday.
It comes as Boris Johnson announced a new national lockdown – which is going to include forced closures of all non essential outlets as well as companies from 00:01 on Thursday.
The government’s furlough scheme – which has been due to end on October 31 – will also be extended.
The FCA mentioned proposals will include allowing those who have not yet requested a payment holiday to apply for one.
This could be up to 6 months – while those with buy-now-pay-later debts will be able to request a holiday of up to six months.
However, it warned this should only be applied in cases where consumers are actually not able to make repayments as interest will will begin to accrue despite the so called break.
“To support those financially impacted by coronavirus, we are going to propose that customer credit consumers who have not yet had a transaction deferral beneath the July guidance of ours can request one,” a statement said.
“This may last for as much as six weeks until it’s obviously not in the customer’s interests. Under our proposals borrowers who are currently benefitting from a very first payment deferral under the July guidance of ours will be in a position to apply for a second deferral.
“For high-cost short term recognition (such as payday loans), consumers will be able to apply for a transaction deferral of one month if they have not already had one.
“We is going to work with trade bodies and lenders regarding how to apply these proposals as quickly as is possible, and can make an additional announcement shortly.
“In the meantime, consumer credit buyers should not contact the lender of theirs just yet. Lenders will provide information shortly on what this means for their clients and how to apply for this particular support if the proposals of ours are confirmed.”
Anyone struggling to pay the bills of theirs should talk to their lender to discuss tailored support, the FCA believed.
This may incorporate a payment schedule or a suspension of payments altogether.
The FCA is also proposing to extend mortgage holidays for homeowners.
It is likely to announce a new six month extension on Monday, which would include things like newly struggling households and those that are actually on a mortgage rest.
“Mortgage borrowers who have already benefitted from a 6 month payment deferral and continue to be encountering payment difficulties ought to speak to their lender to agree tailored support,” a statement said.
Eric Leenders, at UK Finance, which oversees the banking sector, said anyone concerned shouldn’t contact their bank or perhaps developing society simply yet.
“Lenders are providing unprecedented levels of assistance to aid customers with the Covid 19 crisis & stand ready to give recurring assistance to those who are in need, such as:
- Wells Fargo Student Loans
- Quicken Loans
- AES Student Loans
- Rocket Loans
- Dicover Student Loans
- Wells Fargo Student Loans
- GreatLakes Student Loans
- Caliber Home Loans
- Nelnet Student Loans
“The industry is working closely with the Financial Conduct Authority to ensure customers impacted by the brand new lockdown methods announced the evening will be able to print on the most appropriate support.
“Customers looking for to view this support do not need to contact their lenders just yet. Lenders are going to provide info after 2nd November on how to apply for this particular support.”
