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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 be in touch 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.

How long do payment holidays last?

We’ve offered payment holidays and repayment deferrals for up to 3 months to provide short-term help to customers whose finances have been affected by the coronavirus outbreak.

If we’ve agreed to a 3-month payment holiday, or repayment deferral, you won’t have to pay anything during that time. 

For example:
Step Date
You agree your payment holiday, or repayment deferral
10 April
Payments, or repayments, included in payment holiday, or repayment deferral
1 May, 1 June, 1 July
End of payment holiday, or repayment deferral
1 July
Next expected payment, or repayment
1 August
For example:
Step You agree your payment holiday, or repayment deferral
Date 10 April
Step Payments, or repayments, included in payment holiday, or repayment deferral
Date 1 May, 1 June, 1 July
Step End of payment holiday, or repayment deferral
Date 1 July
Step Next expected payment, or repayment
Date 1 August

What can you do when your payment holiday ends?

1. Resume your payments

If you can, you’ll resume making monthly payments. See what this would mean for:

Mortgages

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 automatically be reactivated.

Keep in mind

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, term and interest rate. We’ll make sure you’re aware of the amount when we confirm your return to monthly payments and will help you understand your options. 

If you're happy to accept the new monthly payment detailed in your letter, you won’t need to do anything. 

If you’d rather not make the increased monthly payments, there are other options:

  • extending your mortgage term by up to 6 months
  • making a lump sum overpayment
  • extending your payment holiday
  • applying to extend the term of your loan for longer than 6 months
  • switching your rate

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

If you’ve already received your letter with your new monthly payments, you can find out about the next steps.

Loans

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, this will need to be set up again. 

If you’d already missed more than one repayment at the start of the deferral, we’ll get in touch about the solutions available for you to repay those amounts.

Keep in mind

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.

If you have the money available, you may be able to make some additional repayments to fully, or partially, catch up.

If you’d already missed more than one repayment at the start of the deferral, we’ll get in touch about the solutions available for you to repay those amounts.

Credit cards

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.

Keep in mind

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.  Discuss other options

If you’re concerned about resuming payments, don’t worry, we’ll be in touch with you again before your next payment is due and we’ll help you understand your options.

Credit cards and loans

If you’re not going to be able to resume your payments, we have a range of options to support you. Depending on your circumstances, this could include extending your payment holiday or loan deferral.

What should you do?

You don’t need to call us. You should 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 steps to get further support.

Remember, if you’re worried about making future payments, we’ll work with you to determine if a solution is available.

Will your payment holiday affect your credit rating?

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 move your payment dates?

You may be able to move 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 payments 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.