With pressures being placed on finances, the need to obtain some additional financial support may be required, even for a short term basis.
We encourage our customers when seeking short term financial support, to access Credit Unions, who provide more affordable repayment arrangements, at low interest.
You may also consider accessing the Advance Universal Credit Payment Loan, prior to your first payment if you have just claimed. Alternatively, if you are already receiving Universal Credit and a change in circumstances due to COVID-19 has occurred, you can apply for a ‘Change in Circumstances Loan’. Please note – these are repaid via set deductions from your monthly Universal Credit payments.
We do understand that on occasions, loans have been obtained elsewhere, for example, pay day lenders, which is why we only support the options detailed above, as they are more manageable when budgeting.
We are also aware that there can be situations where ‘Illegal Money Lenders’, otherwise known as ‘Loan Sharks’ are in operation, and do pray on vulnerable people who are in financial crisis.
Therefore, we want you to remain in a safe environment when managing your money, and avoid these at all costs. It might be difficult to identify who a loan shark is, so here are a few points to look out for and make you aware of who a loan shark may be:
If you have already taken a loan from someone you think is a loan shark but still unsure, have you encountered:
If you have answered at least any one of the above points, you might be borrowing from a loan shark.
For more information on loan sharks, please visit the Illegal Money Lending team’s website here
You can also contact them on 0300 555 2222
Further to the advice that has been given concerning what benefits can be sourced at a time where work is limited or cancelled, and therefore income can become very restricted in order to cover priority debts, for example, rent & Council Tax. Additional advice has been given to help support you through covering other priorities such as gas, electric and water.
This page is designated to provide further financial advice regarding further outgoings, which may revolve around repayments on credit cards, overdrafts, loans etc.
In its latest update the Financial Conduct Authority will suspend its persistent debt rules until October 2020 at the earliest.
These rules related to customers who were only paying the minimum amount on their debt for credit cards.
Simply put, this will mean that lenders would not be obliged to suspend the cards of those who have received communications from their credit card provider or are due to. This will allow banks & lenders to work with their customers and provide support.
However, whilst this is being put in place, it is best to speak to your lender if you encounter any difficulty with making your monthly payment.
Some lenders are offering payment holidays or waiving fees for missed payments, but speaking to your lender about what support they can provide during this period would be advisable.
During a period of crisis, where customers are experiencing difficulty with their finances, possibly just short term budgeting, or needing to access funds for emergency expenditure, we strongly recommend that you avoid pay day/door step lenders. For short term affordable loans, please turn to - Just Credit Union.
The FCA have confirmed that they expect firms not to chase guarantors for payments that have been deferred under the personal loan guidance published on 9th April.
From 6th April this year, all banks must replace daily/monthly fees with a single interest rate to improve transparency. Almost every bank will soon charge around 40%. While many are calling for the changes not to happen, that is unlikely now.
The pressure that is being put on the banks, means that if you are in trouble, and you speak to them about your overdraft, they should look at providing alternative help, such as converting the repayments into a loan, or even freezing interest. Yet this is on a case by case basis.
Banks are offering emergency interest-free overdrafts to customers struggling to keep on top of their finances during the coronavirus pandemic.
HSBC, Bank of Scotland, Halifax and Lloyds Bank are offering temporary £300 interest-free overdrafts.
HSBC have already implemented this measure from today.
Bank of Scotland, Halifax and Lloyds Bank’s measures will automatically come into play on 6th April 2020.
NatWest, RBS, and Ulster Bank meanwhile, have automatically frozen interest rates on overdrafts at their current 19.89 per cent level for three months. NatWest and RBS have also removed all other overdraft fees and charges for three months.
IMPORTANT – Once this 3 month period expires, banks are currently due to return the interest rate to the pre-arranged 39.9%
Elsewhere, Barclays says overdraft interest will automatically be waived from tomorrow (March 27) until the end of April, meaning no charges for customers to use their agreed overdraft - it doesn't allow unarranged overdrafts.
Nationwide have also said they can waive fees, review interest rates, and increase overdrafts for some customers on a case-by-case basis - although you need to get in touch for this as it won't be automatic.
Nationwide does not charge unarranged overdraft fees.
First Direct says it has removed its daily £5 fee for using an unarranged overdraft, cut the maximum monthly charge from £80 to £20 per month, and is retaining its £250 interest free overdraft for all customers (which is provided as standard).”
For more information and to ensure you do not get into other financial difficulty after this temporary support finishes contact your Bank.
Coronavirus: information for consumers on personal loans, credit cards and overdrafts can be found here:
https://www.fca.org.uk/consumers/coronavirus-information-personal-loans-credit-cards-overdrafts
Please visit the 'Money Saving Expert' website, which provides more detailed information about this product support:
https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/
We understand that debts are not limited to just overdraft or credit card and loans. We are aware that some customers may be experiencing difficulties with repaying other debts, such as payday loans, store cards, even just utility debts for former suppliers.
As with the advice we have provided, it is always best to contact the creditor direct to discuss other arrangements of repaying existing debt balances, which may involve varying your existing repayment plan, or going as far as requesting that the account is placed on hold for a period relevant to a period where you will see a downturn in your finances.
Rent-to-Own firm ‘BrightHouse’ has gone into administration. Any customers with agreements to repay are advised to continue with their payments, as administrators now act as the collecting agent. Failing to make repayments, even now the company is in administration, could lead to extra charges and harm a credit score. Servicing, warranties, and insurance claims will continue at present, as will delivery of essential items already ordered, but in line with coronavirus restrictions. These services operated alongside the rent-to-own service.
Debt adviser Sara Williams, who writes the Debt Camel blog, said: "Customers need to think if they can manage to make the repayments. If their income has fallen because of coronavirus, they should ask for a payment break. And if the item is just too expensive, they should ask for a lower payment arrangement. They may be able to make an affordability complaint and get a refund of the interest they have paid on previous items."
Bridgnorth – 07816596645
Oswestry – 07976226255
If you are unable to contact our Money Advice Team, please feel free to complete our online referral tool found in a link below
If you wish to search further information yourself, there are a number of sources, which include some debt charities, these are as follows:
