The Financial Conduct Authority (FCA) has updated its guidance to lenders and it’s mostly good news for those struggling financially due to the current pandemic.
The repossession bans for homes has been extended to 1 April 2021 (except for in exceptional circumstances).
However, for consumer credit borrowers, goods and vehicles can be repossessed from 31 January 2021 – although this should only be done as a last resort.
In both of these cases, you should speak to the lender about what they can do to accommodate you and charities such as Step Change may also be able to offer additional advice.
The FCA has also stressed that payment holidays and other support are still available for those who need it.
The deadline for applying for a payment holiday is 31 March 2021 and it applies to anyone borrowing through mortgages, personal loans, credit cards, store cards and catalogue credit, motor finance (including hire-purchase and leasing agreements), rent-to-own, buy now pay later, pawnbroking agreements and high-cost short-term credit schemes.
Again, this is a conversation you need to have with your lender as to what they can offer.
A payment holiday isn’t automatically offered – they may agree to let you pay a smaller amount for a limited time for example. And as interest rates will continue to accumulate, you should only request a payment holiday if absolutely necessary.
You’re only allowed a payment holiday for a maximum of six months, for three months at a time, which means if you’ve already had one this pandemic you won’t be able to apply for another one. Your lender or a debt charity should be able to advise you on the next steps.