Freeze on car loan and pawn payments set to be extended
The Financial Conduct Authority plans to extend the deadline to apply for a payment freeze until 31 October.To get more auto finance news, you can visit shine news official website.
People who have already applied for support will be able to ask for a further payment deferral.
The proposals cover motor finance, buy-now pay-later, rent-to-own and pawnbroking schemes.
"It is vital that people facing temporary payment difficulties because of the impact of coronavirus get the assistance they need," said Christopher Woolard, interim chief executive at the FCA.
"For those who have already taken a payment freeze and can afford to start making payments, even partially, it is in their best interest to do so, but for those that need help it will be there."
The FCA also plans to extend the ban on repossessions until 31 October for motor finance and rent-to-own customers still facing temporary payment difficulties and who need their vehicles or goods.
The watchdog is asking for comments on the proposals by 5pm on 6 July 2020 and it expects to finalise the guidance shortly afterwards.The FCA, which brought in the initial protections in late April, said lending firms should contact their customers at the end of a first payment freeze to find out if they can resume payments.
It pointed out that if customers can afford to return to making regular repayments it is in their best interest to do so.
If customers can afford to restart repayments, lenders should agree a plan on how the missed payments could be repaid.
Meanwhile anyone who continues to need help should still get help, the watchdog said, and firms should freeze or reduce payments to a level they can afford for a further three months.
Customers who have not yet had a payment freeze would be able to request one up until 31 October 2020.
The watchdog added that payment freezes should not have a negative impact on people's credit files.