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Coronavirus: Car finance freeze extended

Published 02 November 2020

Payment breaks on personal loans, credit cards and motor finance will be extended by six months, if new FCA rules are given the green light. 

According to proposals put forward by the Financial Conduct Authority (FCA) today, some customers who are struggling with debt should be given the opprotunity to have a payment deferral.

The FCA said borrowers who are currently benefitting from a three-month payment deferral - under its July guidance - would be able to apply for a second deferral while high-cost short-term credit (such as payday loans), consumers would be able to apply for a payment deferral of one month. 

The new rules will be welcomed by motorists who are struggling with debt during the ongoing Coronavirus crisis. But the FCA has made it clear that borrowers should only take up this support if they need it and consumer credit customers should continue to make repayments if they can afford to do so.

'We will work with trade bodies and lenders on how to implement these proposals as quickly as possible," said the FCA in a statement. 

'In the meantime, consumer credit customers should not contact their lender just yet. Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed. 

'Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed.

'Consumer credit customers who have already benefitted from payment deferrals and are still experiencing payment difficulties should speak to their lender to agree tailored support.'

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