With a four-week lockdown set to come into force in England on Thursday, the financial regulator has said that lenders should give customers longer to pay back what they owe if necessary.
The new Covid-19 restrictions mean that all non-essential retailers and leisure facilities will close and people will be told to avoid all non-essential travel by private or public transport.
To support those financially affected by coronavirus, the Financial Conduct Authority (FCA) has proposed that consumer credit customers who have not yet had a payment deferral can now request one for up to six months. Borrowers who are currently benefiting from a first payment deferral can apply for a second deferral. These measures apply to credit card, car finance, personal loan, rent-to-own, buy-now pay-later and pawnbroking customers apply across the UK.
Similar measures are proposed for mortgage borrowers.
Customers with short-term credit such as payday loans can apply for a payment deferral of one month.
The regulator plans to work with trade bodies and lenders to implement the proposals as quickly as possible.
It is important that customers continue to make repayments if they can afford to do so, the FCA stressed.
“Borrowers should only take up this support if they need it.”