Britain extends payment freeze to coronavirus-hit borrowers - Metro US

Britain extends payment freeze to coronavirus-hit borrowers

The outbreak of the coronavirus disease (COVID-19) in London

LONDON (Reuters) – Britain’s financial watchdog said on Monday it would extend payment holidays on credit cards, car finance, personal loans and pawned goods before tougher coronavirus restrictions come into effect this week.

The Financial Conduct Authority (FCA) also extended until January the availability of deferrals for mortgage payments after Britain announced a one-month lockdown across England would start on Thursday to contain a second wave of the pandemic.

Consumers who have not yet had a credit payment deferral under guidance issued in July can request one that lasts for up to six months, the FCA said in a statement.

Borrowers who have already had one deferral would be able to apply for a second, the FCA said.

“Borrowers should only take up this support if they need it,” the statement added.

For high-cost, short-term credit such as payday loans, consumers could apply for a payment deferral of one month if they have not already had one, the FCA said.

“We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” the FCA said.

The new lockdown coincides with the traditional start of the Christmas shopping season, a time of heavier use of credit cards and a critical period for retailers seeking to stay in the black for the year.

The FCA said it was also proposing that mortgage borrowers that have not yet asked for a repayment holiday could request one for up to six months in total duration.

Those who had already obtained an initial three-month deferral under guidance that expired last month, or have begun repayments on an initial deferral, could now request another three-month payment holiday, the FCA said.

Mortgage borrowers would have until Jan. 31, 2021 to request a deferral, and no one will have their home repossessed without their agreement until after that date, the watchdog proposed.

The proposals have been put out to public consultation until Thursday before final guidance is published.

“Lenders will provide information after today’s announcement on how to apply for this support,” said Eric Leenders, managing director of personal finance at UK Finance, a banking industry body.

(Reporting by Huw Jones; Editing by Rachel Armstrong and Edmund Blair)

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