Can I get help paying back my overdraft or other debts during the coronavirus pandemic?

The coronavirus crisis has plunged millions of people into desperate financial straits via unemployment or pay cuts. Recognising this, the City watchdog, the Financial Conduct Authority, has said banks and other lenders must bring in a series of measures to help those struggling to pay their bills.

Here’s the help available and the loopholes to be aware of. 


Anyone who has been affected by coronavirus and already has an arranged overdraft can ask their bank to lend them up to £500 interest-free for three months.  The overdraft should be for their main personal current account. 

Credit cards and personal loans

People with outstanding credit card bills or personal loans can now put a freeze on payments for up to three months if they have been hit by the pandemic. Making use of these options should not affect your credit score. 

Sarah Coles of Hargreaves Landsdown, the investment firm, said if you missed payments because you couldn’t get hold of your bank in time to arrange a freeze, your credit rating would not be damaged either. “Where interest is frozen on credit cards, people wouldn’t usually be able to use those cards. That will not apply in this case and people can continue to spend,” Ms Coles added.

The FCA also said people who were still struggling with repayments once the three months were over should be given all help possible to keep on top of their debts.

When do the rules come in? 

The new rules take effect today for customers of HSBC, Lloyds, RBS, Barclays, Santander and Nationwide. Other banks, and firms that provide services such as store cards, catalogue credit and guarantor loans, will have to follow suit before April 14. 

What are the loopholes? 

Nick Hill of the Money & Pensions Service, an official source of free advice, said people should consider the new options before they took on additional high-cost credit but should check what the longer term implications were before making any decisions.  

People who take a three-month holiday from loan or credit card repayments will still be charged interest during that time, meaning the amount they have to pay back at the end will be higher. 

Car loans, buy-now-pay-later and payday loans

Help is also on the way for customers struggling with motor finance agreements, repayment schemes with shops and short-term credit such as payday loans. 

The FCA has said that firms offering car finance or leasing schemes should offer customers a three-month payment freeze if they are having financial difficulties during the pandemic. It also said companies should not use the situation to change customer contracts unfairly and should help customers who want to buy their car outright at the end of the scheme but cannot afford to due to coronavirus. 

At the moment these are just proposals. A final decision on whether the measures will be brought in will be taken later this month.

It was also proposed that customers of payday lenders should be able to take a one-month break from their payments. Interest would not be charged during this time. Those on a rent-to-own, buy-now-pay-later or pawnbroking agreement would be able to stop their payments for three months if they have difficulty paying up. 

In most cases, apart from payday loans, customers will be charged interest during any payment holiday. 

Who will be left out?

So far no help has been promised for those struggling to pay back peer-to-peer loans. Anyone concerned about their situation should contact the Money Advice Service, part of the Money & Pensions Service. 

Are you struggling with a car finance or buy-now-pay-later scheme? Get in touch by emailing