A payment holiday is an agreement you can apply for with your lender to stop or reduce the payments you’re making. This can be used for credit card, loan or mortgage payments to give you a break if you’re struggling with making repayments.

The length of the payment holiday will depend on your payment history and circumstances. If a payment holiday is an option, this will usually be outlined in the terms and conditions of your credit agreement. You can contact your lender if you want to find out more about whether they will offer you a payment holiday.

One benefit of payment holidays is that the payments you don’t make during this time will not be reported as missed payments to credit reference agencies.It’s important to know that interest will normally continue to be charged whilst you’re on a payment holiday, meaning the amount you will owe at the end of the holiday will have increased.