More Help For People Struggling With Loan Debts
Over the course of the past couple of years or so, the number of individuals getting in to financial difficulties on their loans and credit card repayments has increased dramatically. In many cases this has been down to things such as a person losing their job, or being made redundant due to the recession.
But now, banks and building societies, in association with debt help agencies, have announced a new scheme to help those people who suddenly lose their income from falling into an arrears or default situation on their loans, by not being able to make the monthly loan repayments.
The scheme has been jointly developed by the Ministry of Justice, the British Bankers Association (BBA) and the Consumer Credit Counselling Service (CCCS) and will allow those people who find themselves in this situation to just make a minimal token repayment on their loans, until they are able to restore their full income.
Under guidance from the Lending Standards Board, banks, building societies and credit card companies will be able to suspend loan repayments and also reduce, or put a hold on, interest charges on the loan or card. It will also be possible for borrowers to make minimal token repayments on their loans.
For those individuals with at least two separate unsecured debts, such as a personal loan and a credit card, the CCCS will introduce a repayment arrangement whereby a borrower is able to make minimal repayments form just £1. In order to qualify for this scheme, the borrower must take responsibility for their loan debt and be prepared to work with the lender in order to resolve the problem as early as possible. The scheme will last for an initial period of six months.
Kevin Brennan, the Consumer Minister, said “If people in debt genuinely can’t pay for a short period, they should be offered this important relief and the chance to make token payments while they sort out their problems. Lenders recognise that there are sensible alternatives to taking court action, for them as well as for their customers.”
