Payment break problem

griff2742

Has anyone else had the issue that you are struggling to pay loans and car finance due to Covid19 reduced hours, banks and finance company say yes you can have a break however, after the br ak the amount you owe in arrears will be lumped into you monthly payments ? How does this help me. I come out of lockdown and my repayments are so high I go into debt regardless. Why won't they just extend people's terms it's just bonkers. So I can't pay them now and I won't be able to pay them if I take a break and they hike up my repayments in three months? 

ukgibbst

Sainsbury's Bank cancelled the direct debit for a loan I have with them.  I only enquired about possible options, I did not request a payment holiday.  Are Sainsbury's Bank in breach of contract?  Am I now going to be financially impacted by this unauthorised action by Sainsbury's Bank?

sharpe106

ukgibbst said:

Sainsbury's Bank cancelled the direct debit for a loan I have with them.  I only enquired about possible options, I did not request a payment holiday.  Are Sainsbury's Bank in breach of contract?  Am I now going to be financially impacted by this unauthorised action by Sainsbury's Bank?

Financially effected how? You can set it straight back up again or get in contact and ask them to not cancel it.    

sharpe106

griff2742 said:

Has anyone else had the issue that you are struggling to pay loans and car finance due to Covid19 reduced hours, banks and finance company say yes you can have a break however, after the br ak the amount you owe in arrears will be lumped into you monthly payments ? How does this help me. I come out of lockdown and my repayments are so high I go into debt regardless. Why won't they just extend people's terms it's just bonkers. So I can't pay them now and I won't be able to pay them if I take a break and they hike up my repayments in three months? 

As that would cost them. They will not have the money back to relend to somebody else.  

yksi

Speak to them, you may have the option to extend the term rather than increase the payments.

As for ukgibbst why not just make payments as normal then, most will allow you to make manual online payments for the usual amount.

[Deleted User]

It could be worse, they could also higher any interest and keep dropping the credit limit to suit, honestly some £12 fees fine by the regulators allowed to be made.
What stops after me squeezing to pay £400 in future two months, (even already done total of £389 in last two paydays alone; not robbing peter to pay paul but genuine earnings as for the last many years) the credit provider saying great well done, have an even lowered credit limit again...because everyone nearly has lost a job or on way to it so the risk is through the roof so it's lets squeeze those in work regardless.  Thank the fca.   

Galloglass

Speak to them, you may have the option to extend the term rather than increase the payments.

Since the loan is secured on the car, if you were to extend the loan by keeping the car then there will be further depreciation to pay.

If they were to extend the loan and take the car back at the end of the normal contract period, since the finance company will have given up their security for the loan there is no incentive to pay the residual debt. The debt moves from secured to unsecured. 

It's just not how that industry works.

Galloglass

It could be worse, they could also higher any interest and keep dropping the credit limit to suit, honestly some £12 fees fine by the regulators allowed to be made.

The £12 fee was set by this court case. The OFT was replaced by the FCA

https://en.wikipedia.org/wiki/Office_of_Fair_Trading_v_Abbey_National_plc