We said we would keep our support for consumer credit borrowers under review as the coronavirus (Covid-19) pandemic evolved.
Following the announcement of the latest Government restrictions in response to the coronavirus outbreak, we will propose updates to our temporary guidance on personal loans, credit cards, motor finance, rent to own, buy-now pay-later, pawnbroking and high-cost short-term credit to support consumer credit customers financially affected by coronavirus.
It is important that consumer credit customers who can afford to do so continue to make repayments. Borrowers should only take up this support if they need it.
To support those financially affected by coronavirus, we will propose that consumer credit customers who have not yet had a payment deferral under our July guidance can request one. This could last for up to 6 months unless it is obviously not in the customer’s interests. Under our proposals borrowers who are currently benefitting from a first payment deferral under our July guidance would be able to apply for a second deferral.
For high-cost short-term credit (such as payday loans), consumers would be able to apply for a payment deferral of one month if they haven’t already had one.
We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly.
In the meantime, consumer credit customers should not contact their lender just yet. Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed.
Consumer credit customers who have already benefitted from payment deferrals and are still experiencing payment difficulties should speak to their lender to agree tailored support.
It may also be in the interests of consumer credit customers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender.
On Saturday 31 October, we announced that we would propose updates to our guidance to support mortgage borrowers; we will make a further announcement on this later today.