We’re all experiencing the harsh effects of the coronavirus. Some have fallen ill, while others are facing financial difficulties to do being laid off or working shorter hours from home, and more.
The government has promised financial assistance for anyone who has been financially hit by the coronavirus. What does this mean and where can you find help?
We’ve done the research to help you find the answers and assistance you need.
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Assistance with Paying Bills
This is a difficult time for many, as the virus can have a dramatic impact on income. Many are now worried about how they’ll take care of their everyday bills, such as mortgages, rent, loans and more.
Mortgages
On 17 March, the government declared a three-month payment holiday for those who are having a difficult time paying their mortgage. What this mandate does is defer mortgage payments until the end of the payment holiday. After this, payments that were missed during the holiday will either have to be slightly increased to cover the payment deferment, or the mortgage may need to be slightly extended.
It’s important to understand that mortgage providers will handle the issue in different ways. So, it makes good sense to call your mortgage provider to see what terms they’ll offer for the payment holiday.
If you’re in a situation where your income has been impacted due to the virus, and you’re unable to make your mortgage payments, then you must apply for the payment holiday. You’ll need to contact your lender before the due date of your next payment.
Here several points to be aware of:
- The FCA expects lenders to offer payment holidays to all customers who are having payment difficulties due to the current coronavirus pandemic.
- You must apply for a payment holiday from now until the end of the three-month payment holiday. Be aware that you will not have a payment holiday unless your lender has agreed to this arrangement.
- Check with your lender to see if they have other options that may be better for your financial situation. It can’t hurt to ask.
- The FCA has stipulated that a payment holiday due to the coronavirus cannot impact your credit score.
- This payment holiday also includes buy-to-let landlords, if their tenants are experiencing financial problems due to the virus.
- During the payment holiday, interest will continue to be charged on all mortgage balances.
- At the end of the three months payment deferment period, these points will be re-evaluated.
If you were already behind on your mortgage payments, you may still request a payment holiday. However, this will need to be discussed with your lender, to make sure this is the right course for your specific financial situation.
Rent
Right now, there is limited assistance for those who are having a hard time paying rent. However, new evictions from social and private rental homes have been suspended during the coronavirus pandemic. Your landlord cannot evict you for at least this time period.
In Scotland, the government is providing more protection. For instance, landlords must do everything possible to help tenants stay in their rental home, which may include coming up with a more affordable payment plan before eviction proceedings begin.
Landlords can also participate in the three-month mortgage holiday. However, this isn’t specifically covered by any of the rules. So, be aware that some unscrupulous landlords could try to take advantage of the pandemic.
Personal Loans
Banks are also ready to help their customers who are having a hard time making their loan payments. They will follow similar provisions as the mortgage holiday.
If you find yourself in this situation, then be sure to call your bank to see what they may be able to do for you. Some banks are have put together programs where their customer can apply for a payment holiday. However, not all banks have made it clear what they intend to do to assist their customers.
Be aware that before agreeing to a payment holiday, it’s first important to see what terms your lender will offer on the loan repayment holiday or other programs they may offer. Some banks are waiving fees or offering reduced payment. However, these provisions vary from bank to bank. So, be sure to check what terms your lender is offering, before applying for their assistance program.
Credit Cards
Credit card providers are also providing help for their customers, which may include waiving fees and providing payment holidays. However, it’s important to know what the program involves before you agree to sign up.
Some credit card providers may offer an emergency line of credit. While that may seem like a great opportunity, remember that credit card debt is very expensive. If you borrow now, you could face even worse financial problems later.
You should look for 0% balance transfer credit card offers. These do give you a bit of a “payment holiday”, though some applications may face increased rules for obtaining this type of assistance.
The FCA, back in February, said that credit card companies must treat those who have persistent credit debt fairly. This occurred around the same time the 36-month thresholds came into force. If you’re struggling with a lot of debt and you’re not able to pay it, this fairness could be a great help right now.
Overdrafts
This month (April), changes are coming for overdrafts, which could cause additional difficulties for customers. Banks probably won’t back off the increase in their overdraft fees; however, there are some that are trying to help make this a little easier during the coronavirus.
If you’re facing overdrafts, it’s a good idea to contact your bank to see if they’ll provide some assistance with the overdraft fees during the pandemic. It can’t hurt to ask. Just be patient if you try to call, as the banks are very busy right now. You might try using a webform on the bank’s site, or contacting them via email.
These are only a few of the assistance programs that are available right now. If you’re unable to pay your bills, then it’s a good idea to contact your financial institutions to see if they have programs that might help you. Even if they don’t, they may be willing to help you as an individual. Before agreeing to any type of assistance program, always ask what the terms are and obtain all the information before applying. You want to be an informed consumer, and not find yourself in worse financial shape a few months from now.
