We all currently find ourselves in circumstances we have never experienced before. UK Credit recognises this and is committed to working with you so you can find the best outcome for you depending on your individual circumstances.
Please remember if you are experiencing difficulty in making your payments doing nothing is not in your best interest. Simply call us immediately. We are here to help you find the best solution for your circumstances and there are a number of ways we can help you.
Initial Payment Deferral
One of the options available for consideration is an Initial Payment Deferral. It is important for you to understand that an Initial Payment Deferral is not a payment holiday nor is it a contractual right. An Initial Payment Deferral will only be in your best interests under certain circumstances and will only be put in place if these circumstances apply.
An Initial Payment Deferral means you can request to have your monthly payments deferred for a period of up to 3 months without being considered as being in arrears. Initial Payment Deferrals are designed to help you when you are experiencing or can reasonably expect to experience temporary payment difficulties – for example, if you were made redundant or had suffered a reduction in income – in this case, because of the Coronavirus situation.
If you contact us and explain that you are experiencing or can reasonably expect to experience payment difficulties due to Coronavirus then as long as:
- Your account is up to date; or
- Your account is in arrears as a direct result of the Coronavirus; or
- Your account is currently in arrears but in an arrangement
we will ask you whether you would like to consider requesting an Initial Payment Deferral as a solution to your financial difficulties. You can request an Initial Payment Deferral at any time between 9th April 2020 and 31st October 2020.
Once you have requested an Initial Payment Deferral we will assess your situation with you to see if it is in your best interests. As part of that assessment, we will give you adequate information to enable you to understand the implications of an Initial Payment Deferral, including the consequences of interest that is accrued during this period and its effect on the balance due under the agreement and on future payments.
An Initial Payment Deferral request, once agreed, will initially last for up to a maximum of three months subject to what your circumstances dictate would be in your best interests. Of course, for some customers, there is considerable uncertainty as to the future. For these customers, assuming it is appropriate and in your best interests, we may suggest an Initial Payment Deferral period of one or two months dependent on your circumstances with the option to renew it and extend to three months if required.
It is important to remember that an Initial Payment Deferral is not a payment holiday. Interest will continue to be charged during the Initial Payment Deferral period while payments are not being made. Therefore, the amount you owe will increase during the Initial Payment Deferral period. So an Initial Payment Deferral may not be in your best interests but we will discuss the options with you on an individual basis. No fees will be charged for assessing and setting up your Initial Payment Deferral.
Further Payment Deferral
At the end of the Initial Payment Deferral period, we will contact you to determine whether you are in a position to resume making payments or whether you need further support. If you need further support you can be considered for a Further Payment Deferral of up to three months. All the rules applying to Initial Payment Deferrals (above) apply to Further Payment Deferrals. In particular, you will not be required to pay us in this period (although you can elect to make part payments), your credit record won’t be adversely impacted and interest will continue to accrue on your account.
If you can make a part payment and it is affordable it may be in your best interests to do so because it will reduce the amount of interest on the account that is accruing and ultimately reduce the amount you will repay us in the longer term.
The maximum Payment Deferral Payment period combining both the Initial Payment Deferral and the Further Payment Deferral is six months.
In the rest of this guidance note where we refer to Payment Deferrals we will be referring to both Initial Payment Deferrals and Further Payment Deferrals.
Repayment of Payment Defferal Amounts
At the end of a Payment Deferral period, you will have to make up for the missed payments and the additional interest that has accrued during the Payment Deferral period plus any interest that will accrue on these amounts until they are cleared. There are various options for you to do this. For example, by increasing your monthly payments or by extending the term of the loan or by making a lump sum payment. When you call we will be able to explain to you what options are available to you and what they will cost.
If you are unable to resume payments at the end of the Payment Deferral period because of payment difficulties at that time, we will work with you to resolve these difficulties in advance of payments being missed.
Where you have received a Payment Deferral, or a different solution for a period where a Payment Deferral has been deemed not in your interests, as a result of circumstances relating to Coronavirus, you are entitled at the end of the period to forbearance under our existing rules, then as part of this, we will waive any extra interest accrued during the relevant Payment Deferral period.
If at the end of the Payment Deferral period we cannot contact you and you subsequently miss a loan payment due then we will treat the account as being in arrears and act in accordance with our collections and recoveries policy.
Applying for a Payment Deferral
If you are experiencing or expect to experience payment difficulties in the near future and think that a Payment Deferral might be the best remedy for your circumstance, please get in touch and talk to one of our team. Our contact details are as follows:
Phone: 01603 828 828
You should not apply for a loan Payment Deferral if you are not experiencing or do not reasonably expect to experience payment difficulties.
What to do with direct debits
We recommend that you do not cancel your direct debit without speaking to us first. Cancelling your direct debit is not a Payment Deferral and could be counted as a missed payment. This could show up on your credit file and may adversely impact your credit rating. If a Payment Deferral is put in place, we will explain what you should do with your direct debit.
Interest on your loan during the Payment Deferral Period
You will still be charged interest during the Payment Deferral period. However, when the Payment Deferral period is over, we will help you work out an affordable repayment plan to repay the interest accrued and the payments deferred during this period.
When the Payment Deferral ends
At the end of the payment deferral, you will hopefully resume making payments.
If you are still not able to make your full loan payments due to circumstances relating to Coronavirus, then we may offer you further help, for example, a payment arrangement, if these are appropriate to your circumstances.
Your credit file
As long as we have agreed your Payment Deferral then we will not report to the credit reference agencies that any contractual payments have been missed. However, you should be aware that if you take out a Payment Deferral this may impact your ability to obtain credit in the short-medium term future.
If you are behind with your loan payments
UK Credit can put in place Payment Deferrals for borrowers who are experiencing or reasonably expect to experience payment difficulties because of circumstances related to the Coronavirus. Or we may help you put another option better suited to your needs and in your best interest.
If you are currently behind with your payments, UK Credit would expect that you have a payment plan in place and that, you are maintaining this arrangement before considering a Payment Deferral. But please always contact us to discuss your situation and we will do our best to help you find a solution that works for you.
How long do I have to apply for a Payment Deferral?
You should speak to us as soon as you are aware of any circumstances that could lead to you being in financial difficulty and ideally in good time before your next payment is due.
Contacting UK Credit at this time
We are committed to responding to you as quickly as possible. However, due to high levels of demand for help and staff having to work from home it might take us a little longer than usual to answer your call or deal with your request. It is, however, important that you contact us if you are experiencing difficulties as soon as possible.
Are you a Guarantor?
As a guarantor, you may also have concerns regarding payments of the loan, for which you are guarantor. UK Credit is committed to helping both borrowers and guarantors in financial difficulty. You should contact us if you are experiencing or reasonably expect to experience payment difficulties because of circumstances related to Coronavirus.
As the loan will not be considered as being in arrears during the Payment Deferral period we will not pursue the guarantor for any payments during this period but we will make them aware of the Payment Deferral as we will want to keep guarantors informed of the status of the loan for which they are potentially liable.
We will review each account on a case-by-case basis. We can then make sure any arrangements we put in place are tailored personally to you and are in your own best interests.
How to get help
If you are considering whether a Payment Deferral is right for you then you may benefit from talking to someone other than us although we will always do our best to help you. There are a number of sources of debt help and money guidance available that are free to use and impartial provided by a number of not-for-profit debt advice bodies.
- A good source of this information is the FCA website
- In addition, the Money Advice Service’s Money Navigator Tool may help.
If you are experiencing short term difficulty you may feel you are able to deal with you own debts without the need for full debt advice. In which case we would recommend you:
- work out your own budget for which the above FCA link may be helpful
- ensure you pay essential expenses and priority debts before any discretionary expenses or non-priority debts. The Money Advice Service may be helpful for this
- contact all creditors (including us) to discuss your repayments and what is affordable.
What we’re doing at UK Credit
We review each account on a case-by-case basis. This means we can help you put in place solutions that are tailored to you and are in your best interests.
If you need to contact us, you can find our details here.
Off work due to Coronavirus?
If you’re required to take time off work and are employed or self-employed, The Money Advice Service has put together some useful information covering your rights and what you’re entitled to receive.
The government has announced they will pay employees’ wages under the Coronavirus Job Retention Scheme. This will pay 80% of retained workers’ salaries up to £2,500 a month. If applicable, these payments will be backdated to 1st March 2020 and it’s hoped the first payments will be made before the start of April. The scheme may be extended if necessary.
On 26th March 2020, HM Revenue & Customs (HMRC) published guidance confirming who is eligible to claim from the government’s Coronavirus Job Retention Scheme to cover wages for employees who have been furloughed due to Coronavirus, what amounts are available through the scheme, and how employers should make claims.
On 26th March 2020, the government also announced a scheme which will provide support for self-employed individuals who have lost income as a result of the Coronavirus pandemic. Under the Self-employment Income Support Scheme, self-employed individuals will be able to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months. The scheme may be extended if necessary.
Statutory Sick Pay
The government has introduced changes to Statutory Sick Pay (SSP) for anyone required to self-isolate or take time off. During the crisis, SSP will be paid from the first day of illness rather than the fourth day. You’ll also be able to claim SSP if you’re caring for anyone in your household that has been told to self-isolate.
SSP is £94.25 a week and can be paid for up to 28 weeks. To be eligible for SSP, you need to earn at least £118 a week. However, if you’re not eligible for SSP, you can instead claim Universal Credit or Employment and Support Allowance.
How is Coronavirus affecting benefits?
If you receive Universal Credit, you’ll usually need to meet specific requirements to remain eligible. These can include job searching or attending regular meetings. However, due to the pandemic, all requirements for in-person meetings are suspended and you can complete these meetings over the phone instead.
The government has also confirmed that if you’re receiving any disability benefits, you’ll no longer need to attend face-to-face meetings for the next three months. Similarly, if you’re applying for these benefits, you won’t need to complete a face-to-face assessment.
Seek financial help as soon as possible
If you’re concerned that your debts are mounting up and you’re unable to repay them, we’d always suggest seeking independent help from a debt advice charity such as StepChange. They provide a free, impartial and confidential service and they have experience helping people in similar positions.