Money Saving Expert founder Martin Lewis has issued an urgent warning to anyone with a credit card, mortgage, or auto financing – and you need to act fast.
Since the outbreak of the coronavirus pandemic, four vital pillars of personal finance support have been put in place to help the public as the lockdown extends into the abyss of 2020.
Although the pandemic is still not over, many changes to these support schemes are being introduced.
Economic uncertainty persists, with many people and businesses struggling to stay afloat.
Martin said that while not many people can do to stop the impending changes, pay holidays can still provide welcome relief if people manage to get them back before they close.
The money guru stressed that “everyone should assess as soon as possible if they need it.”
How to get a payment holiday
If you request a payment holiday before October 31, it will last three months.
If your finances are affected due to Covid-19, you can request a payment holiday, which will prevent you from making repayments.
If you apply before the end of this month, you will almost automatically benefit from three months. Payment holidays are available on mortgages, overdrafts, credit cards, personal loans, insurance, auto financing, buy-now loans, pawn shops and pawn shops.
There is also one month of payment and an interest holiday for payday loans.
Martin warned that if you’ve already had two three-month days off on one product and request another on that same product, you’ll switch to the post October 31 diet.
As of November 1, there will be a change from one-time payment leave to “personalized support”, which will depend on your situation.
This could include payment holidays, reduced payments, lower interest, or a different product and the help will go on credit files, which will likely have a bigger impact on your ability to get future credit than the help. current proposed.
Martin Lewis insists on only taking payment time off if you really need it like it’s better than missing payments, there are two major consequences:
- Interest accumulates. The money guru said that many people mistakenly assume that interest is frozen if you take a payment holiday, but it isn’t. Interest continues to accumulate and while you are not paying it results in a higher balance and more interest will accumulate. For example, a person who pays £ 600 per month on a mortgage with a remaining term of 12 years and takes a three-month payment holiday will typically have 11 years and nine months to pay off at £ 616 per month. The shorter the remaining time, the greater the impact.
There are plenty of ways to stay up to date with all that is happening in Yorkshire as our reporters work around the clock to bring you the very latest news.
We have our fully customizable YorkshireLive app and means you will only get the news you are interested in.
And we also send daily newsletters that bring the best news and features straight to your inbox.
You can register very simply by inserting your email address in the box at the top of this article, just below the image, or click here.
- This may affect your ability to obtain future credit. Currently, these Covid-19 specific payment holidays are not on your credit report but, as MoneySavingExpert.com revealed in May, lenders can factor them into loan decisions after spotting it via application forms, Open Banking or your payment history. But so far, once the payment holiday is over and you’ve made a few refunds, MSE.com hasn’t had too much of an impact.