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Applying for an initial repayment holiday

An initial repayment holiday lets you delay your first loan repayment by 3 months, meaning your loan repayments don’t start till month 4. You’re still charged interest during those first 3 months but that is included in your monthly repayments.

I’ve taken out a loan with an initial repayment holiday but don’t want that anymore – how do I change back to a standard repayment?

You can’t change your loan once you’ve taken it out, but you do still have options. If you’re in the 2 week cooling off period, you can repay your loan in full and apply for a new one without the initial repayment holiday option. Or you can make an ad hoc payment towards your loan now though depending on the amount, you may be charged interest.

Why is there interest on my loan/Why has my loan amount gone up when I’m not due to pay anything yet/Why does Online Banking/the mobile app show interest/loan amount going up?

Even though you don’t make any repayments for the first 3 months, we still charge interest during that time so that’s what you see on your statement when you look on Online Banking or on the app, and is why your loan amount has gone up. You’re not due us any more money as your repayment amount includes that interest. You can see what your monthly repayments will be when you look at your documents in Mailbox when you log into Online Banking.

When is my first payment due/Where can I find my first payment date?

You’ll find that in your documents in your Mailbox when you log into Online Banking.

If I’m offered an initial repayment holiday, can I change when I take it or for a different length of time?

No, the initial payment holiday is only available at the start of the loan and can only be for 3 months.

My loan term is longer than the one I took out by 3 months, why is this?

If you have an initial repayment holiday, you make the same number of repayments as you do for the standard repayment option, but you start making those repayments 3 months later. For example, if you have a 2 year loan with an initial repayment holiday, you’ll still make 24 repayments but as your first repayment isn’t till month 4, your loan will be paid off after 27 months and that’s what shows in your loan documents.

What’s the difference between the initial repayment holiday and the loan repayment break as a result of COVID-19/Coronavirus?

This initial repayment holiday is just that – the option to delay making your loan repayments for 3 months at the start of your loan. The loan repayment deferral which allows payment holidays during your loan is a response to the impact of COVID-19.

Will a deferred loan/initial repayment holiday cost me more?

Yes, you’ll pay more as interest is still charged during those first 3 months when you don’t pay anything, but that’s been included in your monthly repayment amount. When you get a quote, you’ll see the two options side by side on screen so you’ll know what the cost difference is. Note that the loan will last for 3 months longer than the standard repayment option as you still make the same number of repayments.

Why does it take longer/Does it take longer to pay off a deferred loan/initial repayment holiday?

You make the same number of repayments as you do for the standard repayment option, but you start making those repayments 3 months later. For example, if you take a 2 year loan with an initial repayment holiday, you’ll still make 24 repayments but as your first repayment isn’t till month 4, your loan will last for 27 months. You’ll still be charged interest during those first 3 months so it will cost more than a standard repayment option too.

How do I get a deferred loan/initial repayment holiday?

We may offer you the option to delay starting your repayments for 3 months when you’re given a quote during the online personal loan application if you’re eligible.

If you’re not presented the option on the loan quote page, it means unfortunately we’re unable to offer you the initial repayment holiday. This option isn’t available if you apply through a branch or over the phone.

At what point will I be offered the initial repayment holiday?

If you’re eligible, we will offer you 2 repayment options when you’re given a quote during the online loan application– ‘Now’ and ‘After 3 months’. The initial repayment holiday is the ‘After 3 months’ option. Not every quote will have that option so if you don’t see it, you can’t get it for that quote. This option isn’t available when you apply through a branch or over the phone.

Will selecting the initial repayment holiday option affect my credit score?

Selecting the initial repayment holiday option doesn’t impact your credit score any differently to selecting the standard repayment option.

Will I be offered an initial repayment holiday option if I’ve already got a credit card/mortgage/other with a payment holiday?

Whether we will offer you an initial repayment holiday depends on your individual circumstances and the loan amount. The fact you already have payments holidays on other products doesn’t automatically mean you won’t be offered the option.