What are the FCA payment holiday guidelines for consumers?
The FCA has published payment holiday guidelines for consumers that you can read here. The guidelines include the following:
“While these measures are designed to help you during this difficult time, they may result in increased costs in the longer term. So:
- think carefully before entering into one of these arrangements,
- only do so if you need immediate and temporary financial assistance,
- if you can afford to make some repayments, even if it is a smaller amount than usual, you should continue to do so.
Remember, do not cancel or reduce payments until you’ve contacted your lender. Be as open and transparent as possible with them so that they can offer you the most appropriate support.”
“You can ask for a freeze on repayments for 3 months. However, interest [may*] continue to build during this period, meaning you pay higher costs in the longer term.”
*Bamboo may need to charge interest.
As a result of COVID-19, my income or outgoings have been affected. How can you help?
During these difficult and exceptional times, we are supporting our customers who are facing payment difficulties due to circumstances arising from the Coronavirus pandemic. We are reviewing each case individually. We may offer you either a reduction in payment or a payment holiday of up to three months.
Please get in touch with us using our Coronavirus enquiry form. If we need to discuss anything with you a member of staff will be in touch.
If you ask for a payment holiday, we may charge interest during the payment holiday. At the end of any agreed payment holiday, if you are still unable to resume payments because of payment difficulties at that time, please contact us right away. We will work with you to resolve these difficulties in advance of payments being missed.
In some cases, a reduced payment could be a better option if your expected loss is for a shorter period of time. If you have a guarantor loan we will not look to the guarantor for payment during a Coronavirus payment holiday.
Am I eligible for support?
For those affected by Covid-19, currently, we are offering partial payment holidays and full payment holidays, up to a maximum of three months.
If your income has reduced but you are able to continue making a part payment, a partial payment holiday may be suitable. If you are struggling to maintain any payment, then a payment holiday may be suitable if:
- You have been up to date with your payments, or you have only missed your most recent payment.
- Your income has been impacted as a result of the coronavirus situation.
The situation is continually changing, so this might change. Please check back frequently for any updates.
Will I be charged interest while the payment holiday is in place?
We may charge you contractual interest for the period of the payment holiday, but it will only need to be paid at the end of the loan. If interest is to be charged, it will only be on the outstanding principal balance (not the total amount repayable). We will let you know the amount that has been added to your loan.
What happens at the end of my payment holiday?
Currently, we are offering up to 3 months forbearance. We are expecting most will be able to resume their full monthly payment schedule at the end of their payment holiday. Ahead of resuming our normal monthly payment collection, we will send you a further communication (SMS or email) to remind you when the next payment is due and providing you with online and contact centre support if you have questions or concerns.
Will my credit file be impacted?
If you have been affected by the Coronavirus, we will not report payment holiday or partial payment holidays to the credit reference agencies for the period of the arrangement. When your payment option ends, we will resume our reporting to the credit reference agencies.