Zopa is extending its support to borrowers impacted by the pandemic as England prepares to enter a second lockdown.
The peer-to-peer consumer lender has previously offered borrowers payment freezes or a reduction during the coronavirus outbreak and a spokesperson told Peer2Peer Finance News that it is extending its support to customers that have been financially impacted by the pandemic.
It comes as the Financial Conduct Authority (FCA) set out proposals for further payment deferrals for consumer credit borrowers.
The City regulator said due to increasing restrictions in recent weeks, it has proposed to extend payment deferrals and other support to personal loans, credit cards, motor finance, rent-to-own, buy-now-pay-later and pawnbroking customers who are experiencing payment difficulties because of coronavirus.
These proposals will mean that those who currently have an initial payment deferral, will be eligible for a further payment deferral of up to three months.
And those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total.
High-cost short-term credit consumers, such as those with payday loans, who have not yet had a payment deferral would be eligible for a payment deferral of one month.
The regulator said it’s important that borrowers who can afford to make repayments continue to do so.
The FCA is urging consumers not to contact their lender until the enhanced measures are in place. Under the proposals, borrowers would have until 31 January 2021 to request an initial payment deferral.
A payment deferral under the proposals would not be reported as missed payments on a borrower’s credit file.
“We recognise the challenges that many consumers face as the coronavirus crisis develops, and we are working to ensure support remains available to consumers who need it,” said Sheldon Mills, interim executive director of strategy and competition at the FCA.
“We know that many consumer credit borrowers are vulnerable. That’s why tailored support reflecting borrowers’ individual circumstances will still be offered and remains the most appropriate option for many.
“We are also proposing to extend payment deferrals for some consumer credit products to offer additional support.
“It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so.
“We are also asking borrowers not to contact their lender yet, and instead wait for further updates, including from their lenders, soon.”
The regulator said it will continue to keep the support available to consumers under review.
The FCA is asking for comment on the proposals by 10am on Friday 6 November with the final guidance published as soon as possible after the comment period closes.
This follows an announcement from the regulator in September on tailored support for borrowers affected by Covid-19 after the end of October.