Repayment Holiday

Ballytramore

Due to uncertainty of my salary being paid as I am on furlough I requested a 1 month repayment holiday on a loan I have through my bank.  I had confirmation email saying it was accepted.  BUT the interest on it for 1 month is £216 (estimate) ahhhh.  Can I cancel this repayment holiday?

JATP

Course you can, it's your loan, get back on to your bank.

Pollycat

Ask your bank if you can cancel.

Grumpy_chap

Thank you for your post @Ballytramore - you have highlighted something that is so very important.  

All these payment holidays may help with cash-flow, but they cost money as the debt is still there after the payment holiday plus the debt has increased by the amount of interest that has accrued during the payment holiday.  In the case of a mortgage, where the accrued interest in then spread over many years repayment, the total cost of the payment holiday is staggering.

Sadly many people seem to fail to understand this - though Martin Lewis does say to only take the payment holiday if you absolutely need to.  I think the Government need to do more to communicate the costs of these payment holidays.

The same thing is affecting landlords, where some renters see that a mortgage payment holiday could be available and therefore ask for a waiver of rent due.  Totally unfair, not all landlords can take advantage of the mortgage payment holiday and, even if they do, the tenant won't pay all the extra costs that accrue to the landlord.

It is also said that the payment holidays should not affect credit rating going forwards.  I cannot see how that can be the case.  If I was a lender, and I saw two future applicants - one has proven they have resilience and could 'ride the storm' for three months but the second showed no resilience and immediately requested payment holidays on debts - I know which one I would rate higher in the future.

Good on you @Ballytramore for picking this up - and also deciding you do not need the payment holiday if you can avoid it.  I hope others see this and learn the pitfalls also.

Thrugelmir

 A holiday doesn't mean that you cannot take any action yourself to minimise the longer term financial impact. There's nothing to stop you making a payment, even it's partial if you wish.