Coronavirus: What are creditors doing to help?
There are announcements being made daily about the help that creditors are making available to their customers if they’re affected by Coronavirus. If you’re concerned about the impact on your finances or your situation has already changed, you should contact them as soon as possible to find out what help they can offer.
Some of the measures that creditors are already offering include:
Help with unsecured loans:
You may be able to get a temporary payment break, without any fees, for up to 3 months if your finances have been severely impacted by Coronavirus. It’s very important that you talk to your lender before stopping or reducing any payments as they could issue you with a default notice if you don’t make them aware of the circumstances.
If you agree the payment holiday in advance, then this will be an authorised payment break, which means your credit score won’t be negatively affected. If you stop paying or cancel your direct debit without your lender’s agreement, then this will be unauthorised, and will negatively impact your credit file.
Mortgage payment relief:
There is good news for homeowners, as some lenders are offering to reduce or delay mortgage payments for up to 3 months for anyone who is affected by Coronavirus. It is very important that you speak to your Bank or Building Society as soon as possible about this if you are struggling so they can agree this change. The three main credit reference agencies have recently announced that authorised mortgage payment holidays won’t affect your credit score.
Early access to savings:
If you have savings accounts or ISAs, it is worth speaking to your provider to see if you can access the funds early due to the exceptional circumstances. Some creditors have already dropped the fees for releasing funds to customers who urgently need access to their cash.
Support from credit card providers:
Some creditors may be willing to increase credit card and overdraft limits to help support customers who are struggling with their finances. They may also be willing to increase cash withdrawal limits and offer refunds on credit card cash advance fees.
Choosing to take advantage of any of the above options could negatively impact your credit score, so you should consider how important this is to you before asking to stop or reduce your payments.
What is my lender doing to help in the case of Coronavirus?
Some banks and building societies have already published information about the ways in which they can support their customers through this difficult time. Find out the latest below:
Bank of Scotland
Bank of Scotland have introduced a range of measures to help their customers affected by the virus.
These include no fees for missed payments on credit cards, loans and mortgages, emergency access to savings in fixed term accounts without charges and deposit limits of up to £500 for mobile banking, allowing customers to scan and pay in cheques.
They’re also offering payment holidays on mortgages and loans to help people keep more of their money during the pandemic.
BarclaysBarclays mortgage customers can move their mortgage payments to interest-only payments for up to 12 months or take a 3-month mortgage payment holiday. You can also apply to have your Barclaycard limit increased, and Barclays aren’t charging late payment or cash advance fees for the next 90 days.
You might also be able to withdraw money from your savings accounts without early-withdrawal charges.
Co-operative bankIf you’re a Co-operative bank customer you’ll be able to get access to a 3-month mortgage holiday, as well as individually-tailored financial support during the pandemic by calling their helpline.
If you have been directly affected by COVID-19, or you are worried about missing payments because your workplace has been affected, you can either call the team at Cabot on 0344 556 0263 or get in touch via their contact form. Cabot has a number of solutions to help people and their Customer Consultants are ready to help. If you’re looking to manage your account or make a payment, then they ask you to do this through their website from the comfort of your home.
First Direct are also offering an array of measures to help make things easier financially during the crisis.
Customers can apply for increases in credit card and overdraft limits to help them manage, as well as get access to fixed rate savings accounts without closure charges. Mortgage holidays are also available if your income has been affected, plus individually tailored support to customers with unsecured debt.
Halifax
Halifax have introduced payment holidays on mortgages and loans, emergency access to savings in fixed term accounts without charges, no fees for missed credit card or mortgage payments and deposit limits of up to £500 for mobile banking.
HSBCHSBC customers can choose to either take a mortgage payment holiday or reduce their mortgages, and can also choose to extend the remaining term of their mortgage, switch mortgage rates or switch part or all to interest only mortgage payments.
You’ll also be able to temporarily increase your credit card or overdraft limit, get early access to your savings without being charged and support for unsecured debt customers (this may include deferred or reduced payments).
LloydsLloyd’s bank has introduced the same measures as Halifax and Bank of Scotland (all three are part of Lloyd’s banking group).
NationwideNationwide customers can get access to a 3-month holiday on credit cards and mortgages and penalty-free access to savings in fixed-term bond accounts.
NatWestIf you’re a NatWest customer you’ll be able to get a 3-month payment holiday on your mortgage, a 3-month payment deferral on your loan and refunds on NatWest credit card cash advance fees.
You can apply to increase the credit limit on your NatWest credit card and close your fixed-term savings account without any charge if you wish. Also, you can request an increase of up to £500 on your NatWest debit card withdrawal limit.
SantanderSantander are allowing their customers to increase both their overdraft and credit card limits. Their customers can also get free-of-charge access to money held in Santander fixed-rate bonds and fixed-rate ISAs, as well as the now-mandatory 3-month mortgage payment holiday.
TSBTSB customers will get the mandatory 3-month payment holiday on their mortgages, and personal loan customers can request a break from repayments too. Credit card customers can apply for emergency increases to their limits, and current account customers can now withdraw up to £500 from all UK cash machines.
If you’ve got savings in a fixed-rate bond with TSB you can close this early (free-of-charge) to get access to your money, and you can also access savings in your fixed-rate ISA without having to pay an early withdrawal charge.
Virgin moneyIf you bank with Virgin Money you’ll be able to get a payment holiday on your credit card as long as you’re confident of being able to make future payments, and you may also get the options to extend your credit facility and freeze interest payments.
You’ll be eligble for a 3-month holiday on mortgage payments and you may also be able to access your savings by calling the Virgin Money helpline.
Remember, if you need help that isn’t listed on your bank’s website, then you should get in contact with your bank and see how they can help – they may be able to offer individually-tailored assistance that can help your situation.