Freeze

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people are fighting to be granted with payday loans, car Finance and pawnshop borrowing of, a payment holiday under the plans, The City watchdog.

The Financial Conduct Authority (FCA) said the measures would not know the borrower, the money problems in the middle of the Covid-19-outbreak.

The FCA intends to grant motor finance business, which has a three-month Freeze .

It is also buy to questions, company specializing in rent-to-own-now-pay-to-delay later and pawnbroking loan repayments.

the people with a payday loans, a one-month grace period will be given.

last week, the announced watchdog, a three-month Freeze on loan and credit card repayments.

"We Are very aware of the continued struggle faced by people as a result of the pandemic," said the FCA's interim chief executive, Christopher Woolard.

"to build These measures to the interventions, which is we announced last week and offer much-needed relief for the consumer in these difficult times. "

'Temporary financial difficulties"

The FCA in consultation with finance companies and expects to complete the proposals, the 24. April, "with them into force shortly afterwards."

Motor-finance-company were asked not to take back the cars or The End of loan contracts with customers, the "temporary financial difficulties due to the coronavirus".

The FCA also said, should not cause The Firm to alter contracts in an "unfair" manner, as with the temporary decline in car prices, a result of the pandemic to change, the so-called balloon payment is expected at The End of an agreement.

meanwhile, the pawnbrokers, were not recommended to sell items that have the fight to customers against loan.

The FCA said: "If the company already informed the consumer that they intend to sell the item, you should suspend the sale during the payment Freeze . "

'Disappointing'

The watchdog said the proposed freezing of the payday loans the repayment was for a shorter period of one month, because it "reflects both the much shorter length of most of the loans and the interest rates tend to be higher than for other high-cost credit products, prevents the company from incurring additional interest during The Freeze -time".

But Sara Williams, a consultant who runs the blog, debt camel, the question of why there is a difference in the length of the payment of the holidays, for various types of loans.

"I think these proposals are disappointing," She Said . "It is good that the interest is must be stopped, but many people find a break of a month is not long enough.

"The three-month breaks, it is proposed, for motor vehicle financing and credit cards are both more helpful and more realistic for people with a coronavirus problem. "

But, she added: "A month is better than nothing, so if you need assistance phone and ask for you. "

Mr Woolard said: "We have adapted our measures to certain products. For most of these proposals, the companies and the consumers the amount of interest, the build may be, and balance this against The Need for the immediate, temporary support should be.

"If you have a payment Freeze is not in the interests of the customer, companies should offer alternative solutions, and potentially also the waiver of interest and fees or debt restructuring the term of the loan. "

personal finance, financial conduct authority (fca), coronavirus pandemic, payday lenders, personal debt, money

Source of news: bbc.com