Plans to assist people struggling with payday loans, car finance and pawn shop borrowing have been announced today by the Financial Conduct Authority. This follows an announcement last week of a three-month freeze on loan and credit card repayments.
If passed, the proposals will put in place a three-month freeze on finance companies repossessing vehicles or terminating contracts. A one-month freeze will come into force for pay day loans — the shorter period reflecting the short term of the loan and the usually high interest rates. Firms specialising in rent-to-own, buy-now-pay-later and pawnbroking loans will also be asked to delay repayments.
The FCA will consult with finance firms and expects to finalise its proposals by 24 April, with them coming into force shortly afterwards.
People struggling with payday loans, car finance and pawn shop borrowing will be granted a payment holiday under plans by the City watchdog