The City regulator will be going ahead with new rules requiring personal loan providers to offer temporary payment freezes to borrowers affected by the Covid-19 pandemic.
The payment freeze will apply to credit card debt, personal loans and overdrafts for households which have been faced with a reduction in income, and would otherwise have been able to make loan payments.
Following a consultation, the Financial Conduct Authority (FCA) announced rules requiring regulated firms to offer payment deferrals for three months where customers are facing or expect to face financial difficulty. The freeze will not affect customers’ credit ratings.
Read more: FCA relaxes SMCR rules during pandemic
The FCA said that peer-to-peer lenders, alongside other sectors like payday loans, are not included in the loans, but would come under normal forbearance rules.
The regulator explained that P2P regulated credit agreements are not covered by the guidance but where a firm that happens…