Categories

Personal Loans

Are Personal Loan Lenders Offering COVID-19 Debt Relief?

Through April 20, 2021, Experian, TransUnion and Equifax will offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com to help you protect your financial health during the sudden and unprecedented hardship caused by COVID-19.

If you've been financially impacted by COVID-19—as millions have—you may be worried about how you're going to pay all your bills. In response to the crisis, many companies have enacted new assistance policies and are working with customers to find manageable solutions.

Your personal loan lender may also offer assistance, possibly in the form of payment deferrals or reduced payments. Read on to learn how these programs work and how to qualify.

What Types of Assistance Do Personal Loan Lenders Offer?

Assistance programs won't forgive your debt, but they can make it easier to manage your bills without paying extra fees or hurting your credit. Personal loan lenders' assistance programs may offer:

Deferred Payments

The most common option from lenders appears to be loan deferment, which allows you to temporarily pause your payments. Lenders are generally offering an initial deferment for one to three months, although you may be able to apply for an additional deferment if you still can't afford payments when that ends. Interest will still accrue on your loan while it's in deferment.

Lenders will then add your missed payments to the end of your loan's term, extending your total repayment time. If you'd prefer, you may be able to repay the missed amounts early.

Reduced Payments

Rather than completely deferring your monthly payment, you may be able to temporarily make a lower monthly payment or interest-only payments. The unpaid portion will be added to your loan amount and extend your repayment period.

Waived Fees

Lenders may additionally waive certain fees associated with your account, such as the late payment fees that would otherwise be charged when you miss a full payment. If you've already been charged a fee, you could ask for a refund (although lenders aren't required to offer one).

Also ask about additional fee waivers if you have a personal loan from a bank or credit union where you have a checking or savings account. For example, you might be eligible for waived monthly or maintenance fees on those accounts.

Applying for Assistance

Some lenders have online apps you can use to request assistance after logging into your account. Others ask that you call their customer service department to discuss your circumstances and options.

Creditors may also require proof that you're dealing with a financial hardship. This proof may be a copy of a termination letter or correspondence notifying you of cut hours or reduced wages.

Bank and Personal Loan Lender Assistance Pages

Many lenders have created a page or blog post about their COVID-19 response and how you can contact them to request assistance. They may also provide examples of the types of assistance they offer, but you generally have to submit a form or call customer service to inquire about your specific eligibility and options.

Avant
Bank of America
BBVA
BMO Harris
BCU
BestEgg
Capital One
Discover
Earnest
Eloan
FreedomPlus
HSBC
LendingClub
LendingPoint
LendUp
LightStream
Marcus by Goldman Sachs
Mariner Finance
Navy Federal Credit Union
NetCredit
OneMain Financial
Oportun
OppLoans
Payoff
PenFed
Personify
PNC
Possible Finance
Prosper
Regional Finance
Regions
RISE
Santander
SECU
SoFi
TD Bank
Truist (formerly BB&T and SunTrust)
Upgrade
Upstart
U.S. Bank

How Can Assistance Programs Impact Your Credit?

Once you put your personal loan into an assistance program, you may be able to pause or make smaller payments. Fortunately, the new arrangement likely won't hurt your credit as long as you follow the terms of the agreement.

The Coronavirus Aid, Relief and Economic Security (CARES) Act requires creditors to continue reporting your account as current as long as it was in good standing when the assistance (called an "accommodation" in the act) was put in place. The rule will continue to apply until the latter of July 25, 2020, or 120 days after the national emergency declaration ends.

If your account delinquency predates these assistance programs, or your account becomes late and your lender hasn't granted you assistance, creditors can continue to report your payments as delinquent, which can hurt your credit. However, if you pay the past-due amount and you bring it current—which may be easier if you don't have to make monthly payments—then the creditor will need to start reporting your account as current.

Additionally, even when the CARES Act isn't in effect, having a loan in deferment or forbearance doesn't hurt your credit.

Staying in Control of Your Finances During a Crisis

You can learn more about financial assistance programs and managing your credit in these posts:

The CARES Act offers automatic payment suspension on certain federal student loans and expands forbearance policy on federally backed mortgages.

Additionally, Experian, TransUnion and Equifax are giving U.S. consumers free weekly credit reports through AnnualCreditReport.com. If you want to monitor your credit score and report, you can also get free credit monitoring and FICO® Score tracking from Experian.

Resources