A Payment Deferral is a concession that allows you to pause making your normal monthly repayments for up to six months. During that time, we will pause collection of the normal monthly payments due under your finance agreement.
In mortgages and other types of finance ‘Payment Deferrals’ are also referred to as ‘payment holidays’ and may operate slightly differently.
It is important you understand that a Payment Deferral only puts your monthly payments on hold and those payments are not cancelled, so they will still need to be made up before your finance agreement is completed.
If you make up your Deferred Payment(s) before your normal monthly payments resume, there is no cost for the Deferral. You do also have the option of making up your Deferred Payment(s) over a longer period of time but there is an interest charge for that.
Payment Deferrals can be helpful in an emergency but they should not be used unless absolutely necessary. The FCA have confirmed that people who can afford to continue their repayments should do so; a Payment Deferral can actually make such people’s financial situation and credit profile worse, not better.
As well as offering Payment Deferrals, there are other things we can do to help our customers deal with the impact of coronavirus so please see our Coronavirus Support FAQs for more information.