Three weeks left to request payment holidays to help you if you have problems with your mortgage or credit bills

HARD-UP Britons have accumulated debts and are struggling to make ends meet because of the Covid crisis.

Low-income households are twice as likely as the richest to have increased their debts during the pandemic.

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Covid has hit millions of UK finances, but help is availableCredit: Getty Images – Getty

Also, more than 8 million Britons had to borrow money just to get by.

But the British have been thrown in as a lifeline by the Financial Conduct Authority and have until the end of the month to request a payment holiday.

Payment leave taken against these proposals will not be reported as a missed payment on your credit report.

All payment holidays will end on July 31.

What is a payment holiday and should you request one?

PAYMENT holidays occur when a lender agrees to suspend your monthly repayments for a specified period of time.

This needs to be agreed in advance, so don’t stop repaying until your bank gives you permission to do so.

The majority of lenders now offer payment holidays, so contact your bank to find out how they can help.

The deadline for requesting a payment holiday has been extended to March 31, 2021.

Most of the time, you will need to fill out an online form.

Typically, payment holidays are offered in extreme circumstances and are designed as an emergency measure to help you get through tough financial times.

If you think you should take one, you should speak to your lender to discuss your options – but note that interrupting payments doesn’t remove any debt or financial obligations.

Most lenders will also continue to charge interest during this time, so be aware that these costs will continue to add up.

You should also always continue to make your normal payments if you are financially capable.

If you have already taken the full six-month payment leave, you cannot request another leave.

Sue Anderson, media manager at the debt charity StepChange, said: “If you can continue to make your normal payments without difficulty, then you should.

“Not all of the temporary measures offered by lenders do away with financial obligations – they are designed as an emergency measure to get you through a time when your income may have been seriously affected.

“However, if you need to use them, don’t hesitate to talk to your lenders.

“Although an interruption in payment is usually noted on your credit report, credit reference agencies have confirmed that during the current crisis, it should not have any future influence on your credit status.”

However, lenders can still see if you’ve suspended payments through other methods, like Open Banking.

They can then use that information to decide whether or not to lend to you, meaning that a payment holiday could still impact your ability to borrow money in the future.

So, on which debts can you ask for a break? Here are six payment days you can get:

Mortgage payments

If you’re having trouble keeping up with your mortgage payments, you can request a payment interruption.

You have until the end of the month (March 31) to apply and you can freeze refunds until July 31.

However, it is only available for households that have not already had a payment interruption of more than six months.

If you miss the March deadline, you can still agree to a payment holiday with your lender until the end of July – although you should check to see if that’s possible.

MoneySavingExpert has already warned that taking a payment break may actually prevent you from getting a mortgage, although they won’t affect your credit score.

Asking for mortgage leave shouldn’t be taken lightly – you really should only ask for one if you can’t pay your repayments.

This is because interest will continue to accrue during your payment break, which means your overall repayments will increase.

Indeed, take a mortgage payment holiday could cost you ÂŁ 2,769 in higher repayments.

Credit card bills

Distressed credit card and personal loan customers have three weeks to request a payment holiday.

But you will not be able to request leave if you have already had a payment interruption of more than six months.

You have until the end of the month to apply and the payment holiday will end on July 31.

If you’ve ever had a repayment interruption but are still struggling to keep up, lenders may cancel the interest and charges on your debt.

The FCA told lenders last year that they should consider suspending, reducing, waiving or canceling any interest, fees or charges to prevent customer debts from spiraling out of control.

It only applies to debt incurred as a result of an interruption of payment or a free overdraft, as long as customers comply with the agreed payment plan.

Buy now, pay later

You have until the end of the month to freeze your Buy Now, Pay Later refunds.

These programs allow customers to pay for their purchases in monthly interest-free installments for spread the cost, and common providers include Klarna, Clearpay, and Paypal.

But if you’ve already taken a payment holiday, you won’t be able to request another.

Your payment holiday will end on July 31.

According to Money advice service, your refunds will automatically resume after this point and any you missed will be added to your balance.

It’s in your best interest to keep payments if you can afford it, but if you’re still struggling to cope after your payment holiday ends, you should speak to your provider as soon as possible.

The FCA repressed on buy now, pay suppliers later last month, and those programs will now be regulated by the financial watchdog.

It comes as credit reporting firm Credit Karma has warned that buyers could slide into “unmanageable debt” after revealing The British spent £ 2.3bn on these programs to help fund Christmas.

Auto finance vacations

Some car expenses can be frozen by struggling customers while they get back on their feet.

According to Money Advice Service, auto finance agreements eligible for payment holiday include:

  • personal contract plans
  • individual rental contracts
  • hire-purchase contracts
  • sales agreement
  • credit agreements for the purchase of a vehicle such as a credit sale

However, you should contact your automaker to check exactly which agreements can be suspended.

If you have already taken a payment holiday, you cannot request another.

You have until March 31 to request a payment holiday, which will end on July 31.

If you are still having trouble making your reimbursements after this point, you should discuss additional help available to you with your vehicle manufacturer.

Expensive short-term credit leaves

High-cost short-term credit customers, such as those with payday loans, will only be able to request a one-month payment holiday.

You have until March 31st to request it and it will end at the end of July.

If you have already taken a payment holiday, you cannot request another.

If you still can’t cover the costs, you may be able to extend your payment term or ask for additional help by talking to your lender.

Pawnshop vacation

You can take pawnshop payment leave if your finances have been affected because of Covid.

You have three weeks to request it, and like almost every other holiday, it will end on July 31.

This means that you will have more time to collect the item you pawned, as the pawnshop would have to put the sale on hold during the payment holiday.

If you’re nearing the end of your payment holiday and you’re still having trouble, ask your lender what help is available.

They must provide tailor-made support tailored to your personal situation.

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