Covid payment breaks - what changed for the borrower on 1 October

[Brendan Burgess]

The payment break system was discontinued on 30th Sept. From the borrower's point of view, what actually changed?

1) It was probably easier to get a payment break. There was a system wide quick and easy granting of payment breaks. Since 1 October, each case will be assessed individually. But if a borrower did not have a payment break before and asks for a 3 month break now, they should get it fairly easily.

2) Nothing changed on the credit record.
If you got a payment break in June, it will be noted on your credit record that you did not make any payments in June July or August.
If you get a payment break today, it will be noted that you did not make any payments in October, November or December.

It might be different for the lenders in terms of non performing loans. But this does not have a direct impact on the borrower if they get a payment break. Of course, it might make the lenders less likely to give payment breaks.

Brendan

 

[24601]

The whole "your credit record will not be affected" nonsense from the CCR was bizarre, especially when the CB website reads:
If a lender agrees with a borrower to a payment break with no payments at all for a period of three months, starting in April. The lender will not report this as "missed payments" or a "restructure" event to the Central Credit Register for April, May and June.

If payments were being made, the amount recorded as the "Outstanding Balance" would normally decrease during those months. However as no payments are being made during the payment break period, the "Outstanding Balance" recorded will not decrease. The "Outstanding Balance" information is contained in the credit report.

You credit record was not "impacted" as long as any lender totally ignored the fact that your balance was not reducing for X consecutive months.