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Making loan repayments during Covid-19, what are your options?

Covid-19 has left everyone in very uncertain financial situations – with economies around the world all but grinding to a halt, it can be difficult to know where the next penny is coming from. Managing your finances is of the utmost importance, but what can you do when the rest of the world is in trouble too?

There are options for you, however, during the Covid-19 crisis, to keep your finances as buoyant as possible.

Keep making your payments

If you haven’t been impacted by the difficulties surrounding Covid-19, it’s essential that you keep making your payments as regularly as possible. You might start thinking about deferring payments and putting more money aside for a rainy day, but the truth is your money right now is more essential and better served flowing through the economy rather than sitting dormant. Businesses that are still open are relying on repayments from those who can afford it, so they can better help those who cannot afford it. Keeping your payments consistent is highly important – as everyone stops paying altogether, the situation is only going to be worse for longer.

It can be hard to keep paying when those around you are not, but not being able to pay your bills is a serious tax on mental health, so you are still in a desirable position, even if you are still paying your bills.

arrange a payment holiday

If your ability to earn has been damaged – whether you have lost your job, your place of work is closed indefinitely, or you are unable to sustain your self-employed client base, your only option is to try and arrange a payment holiday from your lender. A payment holiday is a simple idea – you are unable to make your payments, so your lender agrees with you to either lower your payments in line with what you can afford, or they freeze your payments altogether.

There are different kinds of payment holidays – some involve a freeze period followed by the balance due immediately at the end of that period. Others involve the terms of your contract being extended, so the payments you’re missing now are basically tacked onto the end of your agreement.

If you have made all your payments up to this point, with minimal late payments and late fees, etc, they will be likely to look at your application for a payment holiday in good stead. Similarly, anything you can afford to pay, even if it’s a few pounds a week, is a gesture of goodwill. You might be surprised how willing some lenders are to work with you.

Who can offer you a payment holiday?

The concept of a payment holiday is a broad one, and you can get payment holidays from any lender with whom you have an agreement. For example; mortgage companies, landlords, credit card lenders, car finance companies, phone providers, loan providers, energy and utility companies, and much more.

These are difficult times, and companies understand that some customers are having difficult honouring their commitments through no fault of their own. So pick up the phone and contact the companies and they can help you – don’t let yourself fall behind in silence.