British lenders have decided to grant nearly 1.5 million payment holidays to customers on their credit cards and personal loans, according to data released by UK Finance.
The move, which aligns with the guidelines given by the Financial Conduct Authority (FCA), is aimed at aiding customers facing temporary financial difficulties due to the Covid-19 crisis.
Effective 21 May 2020, the lenders have offered payment freeze on 877,800 customer credit cards, which represents a 26% increase from 1 May.
The members of the UK Finance trade association have provided 608,000 payment holidays on personal loans, representing a 30% increase from 1 May.
Apart from the payment holidays, the banks are offering interest-free lending up to three months on the first £500 of arranged overdrafts for over 27 million customers.
Moreover, for more than 30 million customer accounts, the lenders have collectively approved 1.8 million mortgage payment holidays as well.
UK Finance CEO Stephen Jones said: “Lenders have now put in place support across over 30 million customer accounts, from the option of interest-free overdrafts to payment holidays for credit cards, personal loans and mortgages.
“Banks and building societies will continue to help their customers get through the crisis and have a wide range of support available.
“Anyone with concerns about their financial situation should check with their lender to discuss which form of support would be the best choice for them.”
The trade body noted that the interests will be continued to be charged during payment holidays and urged customers to apply only if they need financial assistance.
Customers have also been asked not to cancel their direct debits or standing orders on unsecured credit products before a payment holiday has been granted.