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Payment holidays: what happens when they end?

If you’ve taken a payment holiday on a mortgage or credit card, or a repayment deferral on a loan, we’ll write to you before your payments are due to resume to explain what will happen next.

This will include information about resuming payments and what you can do if you’re not able to resume payments.

What can you do when your payment holiday ends?

Mortgages

1. Resume your payments

You’ll resume your monthly payments from your next payment date. If you had a Direct Debit set up before your payment holiday, it should be automatically reactivated. If you pay by standing order, you’ll need to set this up again.

You may find your monthly payments will increase after your payment holiday. That’s because:

• interest has continued to accrue and be added to your balance during your payment holiday 

• there will be fewer months of your mortgage term remaining for you to repay your balance

The amount your monthly payment increases by will depend on your loan balance, remaining loan term and interest rate. If you're happy to accept the new monthly payment detailed in your letter, you won’t need to do anything. 

Making an overpayment

If you have the funds available, you can choose to make an overpayment to reduce your overall mortgage balance. This will also reduce the amount of interest you pay moving forward.

You can make extra payments whenever you choose, they can be as little, or as much, as you like and whenever suits you.

Find out more about making an overpayment.

2. Reduce your monthly payment, or extend your payment holiday

If it’s not going to be easy to make the increased monthly payments, there may be other options open to you. These could include:

  • extending your mortgage term
  • switching your rate
  • extending your payment holiday

The options available may depend on your circumstances and the date your payment holiday ends.

Find out more about the next steps.

3. Speak to us

If at the end of your payment holiday you’re experiencing enduring financial difficulties and require support, you’ll be able to complete an Income and expenditure form. This will help us understand your current financial position, so we can get in touch to provide personalised support. Filling the form out won’t impact your credit file. However, depending on your circumstances, some of the solutions we offer may. If this is the case, we’ll let you know.

Find out more about the Income and expenditure form.

Loans

1. Resume your payments

You’ll resume your normal monthly loan repayments from your next repayment date. 

If you had a Direct Debit set up before your repayment deferral, it should automatically be reactivated. If you made your repayments by standing order, you’ll need to set it up again. 

Having deferred 3 repayments, if you resume making your usual monthly repayments it will take you longer to repay your loan than it otherwise would have. The total amount you repay on a personal loan won’t change, however, as there won’t be any charges, or additional interest.

Making an extra repayment

If you have the money available, you can make an extra repayment to fully, or partially, catch up on the repayments you deferred. This will mean you’re able to repay your loan faster.

2. Get further support

If you’re not going to be able to make your monthly repayments when they resume, we’ll let you know what further support is available. This could include the option to extend your repayment deferral. 

The options available will depend on your circumstances. You’ll need to wait for us to get in touch before your repayments are due to resume before taking any action.

Find out more about the next steps.

Credit cards

1. Resume your payments

You’ll need to make at least the minimum payment from your next payment date onwards. 

If you had a Direct Debit set up before your payment holiday, it should automatically be reactivated. However, if you cancelled your Direct Debit yourself, or if your payments are made by standing order, you’ll need to set it up again. Help on how to do this can be found in our credit card repayment options.

We’ll go back to calculating your minimum payment as before. This amount may be higher after your payment holiday, because it’s normally based on a percentage of your balance. Any accrued interest, as well as money spent on your card during the payment holiday, will be included in your balance. 

Once you start making credit card payments again, remember it’s always best to pay off as much as you can afford each month to limit the amount of interest you’ll be charged.

Explore more: How to avoid credit card charges

2. Get further support

If you’re not going to be able to make your minimum monthly payments when they resume, we’ll let you know what further support is available. This could include the option to extend your payment holiday. 

The options available will depend on your circumstances. You’ll need to wait for us to get in touch before your payments are due to resume before taking any action. 

Find out more about the next steps.

What happens next?

You’ll receive an email, or letter, explaining when your payments are due to resume, ahead of time. At that stage, we’ll make it clear what to do if you need more support.

When we get in touch, please make sure you take action, one way or another. Either to make sure your Direct Debit, or standing order, is still in place, or to take one of the steps mentioned above to get further support.

Will your payment holiday, or repayment deferral, affect your credit rating?

Taking a payment holiday, or repayment deferral, will not negatively impact your credit file. However, lenders may take into account other information when making future lending decisions.

If you resume your payments at the end of your payment holiday, or repayment deferral, your credit file will not have been affected by it. 

If you’re not able to resume payments, we’ll explain any potential impact on your credit file when we talk to you about alternative options.

Can you change your payment dates?

You may be able to change your payments to another date, if there’s a more convenient time of the month for you to pay.

Can you end a payment holiday early?

If you’d like to end your mortgage payment holiday early, please call us on 0800 169 6333 and select option 0.

If you’re in a position to make payments on your credit card, or loan, during your payment holiday, or deferral period, you can. For example, you can still make repayments towards your loan, or pay off some of your credit card balance.

It’s easy to get in touch online. Talk to us directly through our chat channels.