4.4m payment holidays granted to struggling borrowers

Some 4.4 million payment holidays have now been granted to borrowers struggling financially due to coronavirus, according to a trade association.

Of the 4.4 million payment deferrals granted across mortgages, credit cards and personal loans since the start of the pandemic, 323,700 remain in place, UK Finance said.

Some 162,000 mortgage payment holidays remain in place, down from a peak of 1.8 million in June.

A further 97,300 payment deferrals are in place on credit cards and 64,400 on personal loans.

UK Finance said that as existing support measures come to an end on October 31 2020, the banking and finance industry is committed to supporting mortgage, personal loan and credit card customers facing financial difficulty.

Ongoing support for mortgage customers may include extending the length of the mortgage term, switching temporarily to an interest-only mortgage and deferring interest payments.

Credit card and personal loan customers may still be able to make reduced payments for a further short period if the customer’s circumstances are expected to improve.

A longer-term repayment plan may be needed for those in more severe financial difficulties.

Lenders may also consider whether outstanding credit should be refinanced at a sustainably affordable payment rate.

Eric Leenders, managing director of personal finance, UK Finance, said: “We understand that many people’s finances will continue to be impacted by this pandemic and want to reassure them that ongoing help is available, tailored to their individual circumstances.

“It will always be in the best interest of customers to resume making payments on their mortgage, loan or credit card if they’re able to do so.

“However, anyone still experiencing financial difficulty should get in touch as early as possible to discuss the options available, starting by checking their lender’s website which will be updated with the latest information.”

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