Help with Personal Loans and Credit Card Debt During the COVID-19 Pandemic

Help with Personal Loans and Credit Card Debt During the COVID-19 Pandemic

22/07/2020

The COVID-19 pandemic has created a significant amount of disruption to personal finances. Rest assured, however, several schemes and initiatives have been announced recently which have been designed to lessen the financial strain felt by many during this time.

If you are struggling with credit card debt or personal loans as a result of the pandemic, help is at hand. You are currently able to ask for a freeze on repayments for a period of three months up until 31 October. Additionally, individuals who have already taken advantage of a three month break can now ask for a further three months, bringing the total payment freeze period to 6 months.

While this may seem a tempting solution for many, it is worth noting payment breaks come with a downside. During this period, your interest will continue to build, meaning you will pay more in the long term. Although these measures will help many during this difficult time, for some, they will not be enough to fix long term problems with debt.

Many have already questioned the long term impact of individuals taking a 6 month break from payments, questioning whether these consumers are simply storing up unmanageable levels of debt for the future. For this reason, if you feel you can afford to continue to pay your debt (either in full or in smaller sums) then it would be advisable to do so.

While taking payment breaks won’t affect your credit ratingbe reflected on your credit file, it’s also worth noting there are other ways for loan providers to check if consumers have taken a payment holiday. For instance, some may request bank statements showing where breaks have occurred. This in turn may affect the ways individuals can borrow in the future.

If you are struggling with over £4,000 worth of debt, and live in Scotland, our advisers are here to give you free, confidential advice on all the options available to you. Our goal is to empower you to make an informed decision about the best ways to deal with debt going forward.

If you would like to get in touch, we are available 6 days a week on 0141 300 5656 or book a call-back below.

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