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Sharp rise in borrowers forced to seek loan payment breaks


BPFI chief executive Brian Hayes

BPFI chief executive Brian Hayes

BPFI chief executive Brian Hayes

New data shows that 140,000 payment breaks have been issued by lenders.

Close to 80,000 of these were for mortgages.

Lenders are now writing to those on an existing payment break to set out the options once the current payment break ends, the Banking and Payments Federation said.

Some 38,000 smaller firms have been granted payment breaks on their loans, as the pandemic wreaks economic havoc.

Just a month ago, the banking body said 65,000 mortgage payment breaks and more than 22,000 SME payment breaks were granted.

This means the overall number of borrowers on a payment break is up 60pc in a month.

Mortgage holders and business owners seeking an extension of their payment break have been warned they only have until the end of June to get it agreed.

And the Banking and Payments Federation Ireland (BPFI) has published a guide to the Covid-19 payment breaks to help those who have an existing break and want to know their options as they reach the end of their initial three-month break.

It also provides advice for those who may need a payment break but have not yet taken one.

BPFI chief executive Brian Hayes said: "For those who have been directly impacted by Covid-19 and who have not yet sought a payment break but feel they may have difficulty managing their repayments, we are urging these customers to contact their lender as early as possible in June."

He said a deadline of June 30 has been set by the European Banking Authority (EBA) for lenders to process and grant Covid-19 related payment breaks.

"It is essential that customers apply for a payment break as soon as possible if they feel they need one."

The guide sets out how to go about getting a payment break extension. It also outlines other repayment options for borrowers, including term extensions on mortgages.

Mr Hayes added: "Our key message to customers is to engage with their lender as soon as possible, this is the first and most important thing they can do.

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"Our members have well established support systems and dedicated teams in place so the earlier customers discuss their concerns with their lender, the sooner the lender can understand their circumstances and work through the most appropriate solution for them."

The banks, non-bank lenders and credit service firms that handle loans owned by vultures, initially reacted by offering customers a three-month break on their mortgage payments.

This is now being extended to six months.

However, stretched borrowers who are forced to take a six-month mortgage payment break have been warned that thousands of euro will be racked up in interest payments. This is because interest will still accrue on the loan.

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