If you’re struggling to keep up with your consumer credit repayments because of coronavirus, or you’re coming to the end of a payment holiday and wondering what happens next, find out what your next steps may be.
- talk to your lender if you’re struggling to manage your finances
- if you can afford to make some of your repayments, even if it’s a smaller amount than usual, you should do so
- you shouldn't cancel or reduce payments until you’ve contacted your lender
- if you have general questions for your lender, check their website first to see if the answer is available online
Learn more about:
- tailored support from your lender
- lender support for credit products (including personal loans, credit cards, store cards, catalogue credit, motor finance, rent-to-own, buy now pay later and pawnbroking agreements)
- high-cost short-term credit (including payday loans)
- where to find help managing money and debt
- vulnerable consumers
From 1 April 2021, if you're struggling financially as a result of coronavirus, your lender will provide tailored support that will take into account your individual circumstances.
This support will be available if you’re struggling for the first time, or if you’ve already received support, such as a payment holiday, that’s coming to an end (or has ended).
Your lender should:
- work with you to provide support before you miss payments
- be flexible and use a range of short and longer-term options to support you – this could include a period of no payments or reduced payments
- give you time to repay what you owe and not pressurise you into repaying your debt within an unreasonably short period of time
- direct you to debt help or money guidance, and allow you to access debt advice before deciding on the support you take
- where appropriate, put in place a sustainable repayment plan that is affordable and considers your wider financial situation (including other debts and essential living expenses)
- prevent your debts from escalating (once a repayment plan is in place) by suspending, reducing, waiving or cancelling any interest, fees or charges to make that happen
Remember, your options will depend on your circumstances.
When assessing what options are best for you (including the amount you can afford to repay) your lender will consider your essential living expenses, which could include:
- mortgage payments, rent and council tax
- reasonable food, clothing, health care and travel costs
- other costs, where non-payment could result in the loss of your home or essential goods or services
If you need tailored support from your lender this may be reflected on your credit file in line with normal reporting processes.
This will help make sure lenders have an accurate picture of your financial circumstances and reduce the risk of unaffordable lending.
Your lender should be clear about what this support could mean for your credit file.
Contacting your lender
Don’t wait until you miss a payment, contact your lender as soon as possible if you’re finding it difficult to manage your finances. Contact details should be available on your lender’s website and on their other communications with you.
Lenders have committed to responding as quickly as possible but, due to high levels of demand and staff having to work from home, service levels might be slower than usual.
If you have a general question for your lender, check their website first to see if the answer is available online.
Working with your lender
Before agreeing on any support, your lender may need to collect information on your circumstances and should give you enough information so you can make an informed decision. This may include directing you to their website, so you can learn about the different options available.
It’s important to be open and honest about your financial situation with your lender, so you can agree an option that's right for you.
The deadline to apply for a payment deferral under the Payment Deferral Guidance was 31 March 2021 and all payment deferrals issued under this guidance ended on 31 July 2021.
If you are newly affected by coronavirus (or if it starts affecting you again) your lender should provide support tailored to your circumstances, under our Tailored Support Guidance. This may include agreeing to reduced or no payments for a time, if that is appropriate, even if you had a payment deferral previously under the Payment Deferral Guidance. If you can afford to repay your consumer credit product, it’s in your best interests to do so.
If your lender agrees to provide you with more support under our Tailored Support Guidance, this may be reported to your credit file in accordance with normal reporting processes. Your lender should tell you what this will mean for you and your credit file.
If you’re having trouble with your finances because of coronavirus, speak to your lender about what support is available.
Support is available whether you need help for the first time, or if you’ve already had support with the cost of your borrowing. This support may include:
- reducing or waiving interest
- agreeing a plan of staged reductions in your overdraft limit and your balance
- supporting you to reduce your overdraft use by transferring the debt to an alternative credit product on more favourable terms
You should be as open and honest as possible about your situation when talking to your bank or lender. This will help them to give you the option that best meet your needs.
Firms can repossess goods and vehicles. But this should only be done as a last resort. Any repossession action will also have to follow relevant Government public health guidelines and regulations, for example on social distancing and shielding.
We expect firms to exercise particular care when dealing with vulnerable customers. They should carefully consider the potential impact on these customers when deciding whether to repossess goods or vehicles.
Your lender should keep you fully informed and discuss the potential consequences of suspending any steps towards repossession, including on the value of your goods or vehicle.
Find out more about managing money and debt if you've been affected by the coronavirus pandemic.
This information might also be helpful to you if you were struggling to make payments before the pandemic, if you’re in longer-term financial difficulty, or if you’re worried about how you will manage your payments and debts in the future.
For more information on managing your money during and after the coronavirus pandemic, you can also use MoneyHelper's Money Navigator tool.
Lenders should consider the needs of customers who may be vulnerable.
Circumstances that may cause you to become vulnerable include:
- poor health (physical or mental)
- low financial or emotional resilience
- life events such as bereavement or divorce
- low capability, including poor digital skills (such as your ability to communicate and make transactions online), language and cognitive skills, and low financial capability
Coronavirus, and the measures introduced to help manage the pandemic, such as local restrictions, may affect personal circumstances in ways that could cause vulnerability.
Lenders should be aware that an individual’s circumstances could change quickly in a way that could make them vulnerable.
If you think you’re in circumstances that mean you’re vulnerable, it’s important to let your lender know when you contact them, so they can work out how best to support you.
22/06/2020: Information added in highlight box on the next steps when these measures end.