The latest guidance from the Financial Conduct Authority (FCA) came into force yesterday so we’ve taken a look at what this guidance is and how it could impact you.
The FCA advise that if you are able to keep up with payments that you do so and to only look at other options if you need to as you will still need to repay the full amount over time.
However, if you are struggling with payments during the current pandemic then the FCA has updated their advice on payment deferrals. Sometimes known as payment holidays, payment breaks or payment freezes, payment deferrals are when you agree with your lease funder to stop making payments for a short period but will make up these missed payments later.
The guidance advises that a customer can defer payments for up to six months in total, so if you have not yet had a payment deferral you can apply for one of up to six months. If you are currently in a payment break or have previously had one then you will be able to extend or apply for a second, provided the total length is not more than six months.
If you apply for a payment deferral your lease company will make sure this is in your best interest before agreeing to it. This is because sometimes a break in payments may not be the best option for you and they will then look at other options that can be tailored to your requirements.
For customers who have already had six months of payments deferred then you can still contact your funder as they will look at tailored options for you as well.
The FCA has advised that customers will have until the 31st of March 2021 to apply for an initial or further payment holiday and extensions of any deferrals will need to be completed by the 31st of July 2021. This means if you have not had a payment break but think you will need one you should apply for this in plenty of time before your February payment is due to be taken so you can have the six months of payment break from February to July.
Under the FCA’s guidance if you have a payment deferral this will not be noted on your credit file as a missed payment. Tailored support may be reported on your credit file, but your funder should let you know if this is the case before you agree to any support from them.
You will need to speak to your funder directly to discuss your options if you are struggling with payments but if you are unsure on the correct department or best phone number then our Support Team will be able to advise and you can reach them on 0330 221 0000.