Car finance and payday loan customers to be offered payment freezes amid coronavirus

24 April 2020, 11:09 | Updated: 24 April 2020, 11:14

The FCA has brought in new measures to help borrowers during coronavirus (stock images)
The FCA has brought in new measures to help borrowers during coronavirus (stock images). Picture: Getty

Some loan repayments can postponed by up to three months, the FCA has confirmed.

Customers will soon be able to request a freeze in car finance and payday loan repayments due to the coronavirus pandemic.

Read more: Dr Hilary warns public over ‘worrying’ coronavirus treatments including disinfectant injections

The Financial Conduct Authority (FCA) have confirmed that a range of temporary new measures - which include payment and interest freezes - will be enacted on 27 April.

Car finance repayments can be frozen for three months
Car finance repayments can be frozen for three months. Picture: Getty

For car finance repayments, customers will be able to request a three month freeze for motor finance, rent-to-own (RTO), buy-now pay-later (BNPL) and pawnbroking agreements.

For payday loans, customers can request that repayments are frozen for a month with no additional interest.

Visit the FCA website for more information

Customers should be able to request a payment deferral at any point within three months of the measures coming into place.

Read more: Dad reveals breathing technique helped him recover from coronavirus in intensive care unit

Firms have been told by the FCA to freeze payments for customers facing difficulties, and the watchdog has also said cars should not be repossessed during this time.

FCA boss Christopher Woolard said, according the City A.M: "We have worked at pace to introduce temporary financial relief tailored for a range of specific credit products.

"Many firms are already working with their customers, but these measures ensure all consumers affected by the coronavirus emergency can apply for a temporary freeze on their payments."

If a customer is unable to make the loan repayments within the deferral, they should contact the lender. The FCA has said that the firm should then work with the customer to resolve the difficulties before payments are missed.

NOW READ:

Gogglebox hit by 163 Ofcom complaints as fans accuse sisters Ellie and Izzi Warner of not social distancing