With new lockdown restrictions due to COVID-19 imminent, the U.K.’s Financial Conduct Authority (FCA) has extended loan holidays for those who still can’t pay off loans or make mortgage payments due to the pandemic’s economic effects, a pair of press releases stated.
The FCA said the relief on payments for things like personal loans; credit cards; motor finance; rent to own; buy now, pay later; pawnbroking; and high-cost, short-term credit will be extended for six months for people to apply.
“It is important that consumer credit customers who can afford to do so continue to make repayments,” one of the releases stated. “Borrowers should only take up this support if they need it.”
For high-cost, short-term credit, like payday loans, consumers will have the option to apply for a payment deferral of one month if they haven’t done so before.
One of the releases stated those who haven’t had the chance to request a deferral for their mortgage will now be able to request one for at least the next six months. In addition, according to the proposal, borrowers who already had a deferral for a period of less than six months will be able to request another. The max payment deferral time would be six months.
Mortgage borrowers or loan recipients who already had a full six-month deferral but are still facing financial difficulties should contact their lender to agree to tailored support, both releases clarified.
In separate news from June, Maha El Dimachki, who was head of payments for the FCA at the time, told PYMNTS the pandemic has accelerated open banking, with the form being used to aid consumers and businesses during the pandemic.
“[A] number of these firms have lifted fees to help their customers or facilitated the use of open banking, such as payment initiation, for making donations to charities,” she said, according to PYMNTS.
She said regulators are especially working on more ways for small businesses to process payments with open banking.