For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.


Payment Freeze – Detailed guide, FAQs, Tips & More

Payment Freeze

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Do you need a payment freeze to make debt payments more manageable or to avoid debts in the first place? 

You may be able to get your creditors to agree to freeze all payments on your account while you straighten up your finances.

We’ve answered the most asked questions about payment freeze and payment deferral, just below!

What is a payment freeze?

A payment freeze is when you get your creditor to agree to pause (freeze!) all payments for so many weeks or months, typically three months. Sometimes the payment freeze will also freeze interest, while on other occasions the interest will still accumulate and need to be repaid later. Your payments afterwards may be higher as a result.  

The common reason for needing a payment freeze are unforeseen costs, such as car repairs or home maintenance. Or maybe because your debts are piling up and you are struggling to repay them all. 

In the case of financial difficulty, a payment freeze can loosen the load and help repay some debts before concentrating on others. 

Is it the same as a payment holiday?

A payment freeze is the same as a payment holiday. Sometimes they are called a payment holiday because you are taking a holiday from the obligation to pay. 

Payment holiday was the term widely used during the COVID 19 pandemic, including by the Financial Conduct Authority (FCA). Coronavirus payment holidays have now ended. People were receiving a payment holiday on all types of credit agreements, including a mortgage payment holiday. 

Another name is a payment deferral. You are not defaulting on your account payments, but simply deferring them for three months to pay later. 

Can you freeze loan repayments?

You can freeze loan payments as part of a payment holiday or payment freeze. If you pay back your loan debt monthly, you may ask your creditor to stop these payments so you can get your finances back on track.

We’ll provide a clear way to do this later in our payment holiday guide. 

Can you freeze credit card repayments?

It is possible to get a payment freeze on your credit card repayment term. If you have credit cards you are struggling to repay, you may want to consider asking one or more of your credit card lenders to give you a payment holiday for three months – or as required. 

How to ask for a payment freeze?

To ask for your payments to be frozen for three months, you should contact the lender directly and make your request. You will need to support your request by providing evidence that a payment holiday is needed. This can be done by showing your monthly budget, highlighting all your income and essential expenses. 

You should also explain how your financial situation has changed since you signed the credit agreement, and how you plan to be able to pay again in the future. 

If you need help to create a monthly budget, follow our budgeting guidance here or use the services offered by a charity!

Do creditors have to give a payment holiday?

There is no obligation for any creditor to give you a payment holiday. 

However, many creditors will still agree to the payment deferral providing you can give evidence of why it is a good idea and how it will prevent you from creating debts you cannot repay. 

My payment freeze was rejected, what now?

If your request for a payment holiday was rejected, you may want to ask the lender to freeze the interest instead. 

You’ll still need to pay the minimum payments, but at least your debt will not be growing while your correct your personal finance or pay other debt.

We have a letter template you can download for free to help you do this!

Will I still receive my monthly statement?

Customers are likely to carry on receiving a monthly statement even during a payment holiday. This is to keep you aware of your borrowing and your account. If you spot a mistake you should contact the lender directly. 

Will my minimum payment increase after the payment freeze period?

If you received a payment holiday without having the interest frozen, your monthly payments after the payment deferral period could be higher. This is because the amount you owe will have carried on increasing due to the interest being added, even when not making monthly payments. 

If you manage to get a payment deferral on your interest payments simultaneously, your minimum monhtly payments should not increase. However, it is always best to contact your lender for accurate information and support. 

Will a payment freeze harm my credit score?

Your credit file will not be affected by a payment holiday. When you have agreed to stop payments with the lender, you are not defaulting on these payments and therefore they should not be reported as such on your credit report account. 

If you are in the middle of a payment holiday and want to make sure, you should use a credit reference agency to check. 

The best credit reference agencies offer free trials to check – but don’t forget to cancel or you’ll be charged monthly payments for the website’s services. 

Can I extend my payment freeze?

During the coronavirus pandemic, it was much easier to have a payment holiday extended as the Financial Conduct Authority and others were making it compulsory. However, as these types of coronavirus payment freezes are coming to an end, it is difficult to get a creditor to agree on deferring further payments. 

You might get an agreement to extend if you have a good reason.

What happens if I still can’t make my payments after the payment freeze period ends?

If you are still experiencing financial difficulty once your payment holiday ends, please contact a charity. There are some excellent UK charities offering money support and services. Their services are all personalised and confidential for your peace of mind. 

You may want to consider a token offer instead. 

You may be able to agree to another three months repayment holiday if you can support a second request with good reason and evidence. 

Considering debt solutions and free debt help

If you fail to arrange an agreement for a further holiday, or if you just want to consider other options to avoid debts, see our debt solutions page

We discuss the different ways you can get out of your debts and sometimes avoid paying altogether. 

And don’t forget there are plenty of charity services waiting in the wings to help. Please contact them for more information.


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Are you struggling with debt?
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