What is a payment holiday?

If you are not able to make your personal loan payments due to coronavirus, you can apply for a 3 month loan payment holiday.

  • You can reduce your monthly payments to £1 per month, for 3 months.
  • If you’ve already had 3 months of support and need longer, you can apply for a further 3 months (up to a total of 6 months).

When you’ll need to apply by

All payment holidays must end by 31 July 2021. If you decide a payment holiday is right for you, you need to apply by 31 March 2021.

However, if you’re newly affected by coronavirus, and you want to benefit from the full 6 months of available support, you should apply at least 7 working days before your February 2021 payment is due.

If you’ve already taken one 3 month payment holiday, you have until 31 March 2021 to apply for a second one.

After 31 March 2021, you can extend an existing payment holiday up until the 31 July 2021. This is as long as:

  • it doesn’t go over the 6-month payment holiday limit, and
  • there are no gaps in the support.

If you’ve already had 6 months of support, you can’t apply for another payment holiday.

Find out what you can do after your payment holiday ends


Who can apply?

You can apply for a personal loan payment holiday if:

  • Your finances have been affected by coronavirus – for example, you can’t work due to self-isolation, or new childcare responsibilities.
  • You’re up-to-date with your monthly loan payments. If you’re already behind on your personal loan payments, our money worries page page can help.
  • Both loan holders agree to doing so, if this is a joint loan.
  • You haven’t already had 6 months of payment support.

The impact of taking a personal loan payment holiday

Your credit rating

Although a payment holiday won’t affect your credit rating, lenders may look at other information (for example, information provided by you, or bank account information) when they decide whether to lend to you in the future.

Future payments

It’s important to understand that interest will continue to build at your usual rate during the holiday.

This means that the total amount of interest you’ll pay back will increase.

Examples of payment increases

To give you an idea of how your payments may rise after taking 3 months off.


Examples of the impact on payments and interest of taking a payment holiday on a £10,000 loan.
Personal loan examples £10K loan over 5 years at 10.9% per annum and payment holiday taken at 31 months £10k loan over 5 years at 2.9% per annum and payment holiday taken at 31 months
Current monthly payment £214.40 £179.07
New monthly payment when payment holiday ends £219.90 £180.26
Increase in monthly payment when payment holiday ends +£5.50 +£1.19
Total additional interest over remaining term £168.00 £38.70

Please note:


  • These examples assume that the original loan is refinanced at the same interest rate, that the remaining term is extended by 3 months, and that these are the payments under the new loan.
  • Examples are illustrative only and may depend on when your payment holiday starts.
  • Actual costs will depend on your individual circumstances.

Before you apply

Things to consider before applying, to make sure a personal loan payment holiday is right for you:

  • We’ll continue to charge interest on your loan at your normal rate during the payment holiday.
  • At the end of your payment holiday, we will write to you about how to start repaying your loan again. You will have the option to amend your loan term and your payments will be recalculated. You may see an increase in your monthly payments due to the interest added during your payment holiday.
  • The best time for you to take out a payment holiday will depend on your personal situation.

Applying for a personal loan payment holiday

  • If you have a joint loan, you only need to complete the form once. This will cover both loan holders.
  • If you have 2 loans with us, you’ll need to submit a new form for each one.
  • Please don’t cancel your Direct Debit. We need this to stay set up so that we can take your £1 monthly payment. Without making this £1 monthly payment, you risk falling into arrears.

What happens after you apply?

Where we can, we’ll start your payment holiday from your next payment. However, if your next payment is due in the next 7 working days, your payment holiday may start the following month.

We'll aim to get back to you and confirm within 5-7 working days from when you submit your payment holiday application. But, due to high volumes of applications right now, it might take slightly longer. Please bear with us.

Note:

Please bear with us and avoid calling in to check on progress, or re-requesting your payment holiday. Rest assured, we have your application and you’ll hear from us soon.