Support for Loan customers in short term difficulty following the COVID-19 payment break

If you’re worried about making your payments for up to a further three months only, a Payment Break Extension might help

What is a Payment Break Extension?

A payment break extension delays your payments for a further three months.

    Can I apply for a Payment Break Extension?

    • You’re eligible to apply if you’ve already had, or are still on a COVID-19 payment break due to end on or before 31 January 2021
    • You're not eligible to apply if you've already had a payment break extension
    • A payment break extension should only be considered if you feel confident that you’ll be able to start making your payments again after this time
    • If you’ve already missed more than one monthly payment since your initial payment break you cannot request the payment break extension. Please get in touch now on 0345 051 0769 so we can discuss how best to support you

    Can I choose the length of my Payment Break Extension?

    We only offer Payment Break Extensions for a duration of three months, but you can still make payments towards your loan during this time. Read ‘Can I make payments during this time’ below to find out how.

      Did you take a COVID-19 payment break on more than one Tesco Bank product or account?

      If you can now make payments for one account and need a Payment Break Extension on another, consider which account you should resume paying first.

      Take some time to compare what a Payment Break Extension will cost in interest charged, as well as any other factors which are important to you, such as the available credit on your credit card, or how quickly you pay off your loan.

      You could also request a Payment Break Extension on multiple accounts and still make payments towards these accounts during your break. To do this, you’ll need to submit a Payment Break Extension form for each account.

      If you’re struggling with what you owe on your accounts and feel you might need our help, please see the support we can offer for longer-term difficulty.

        When will my Payment Break Extension start and what happens next?

        When you’ve submitted the form we’ll take care of everything to put your further payments on hold, including pausing your Direct Debit, so there’s no need to cancel it.

        Where we can, we'll start your payment break from your next payment.

        If your payment is due within the next seven days, this payment will be taken and your extension will start next month. If you’re unable to make this month’s payment, it may be too late to stop your Direct Debit - so please call us now on 0345 051 0769.

        If you’ve already missed more than one monthly payment, please get in touch now on 0345 051 0769 so we can discuss how best to support you.

          When and how are my delayed payments to be made?

          Requesting a Payment Break Extension means you'll still need to make these payments at a later date. Either by:

          • Paying off your delayed payments within your original loan term - if you do this no additional interest will be charged

            You can make payments online with Faster Payments using your Tesco Bank Loan sort code and account number. Alternatively, you can make a debit card payment on 0345 600 6016. We’re unable to accept payments by credit card.

            If you choose early settlement on your loan or refinance, no additional interest will be charged.

            Please note, to avoid being charged three months additional interest, you must pay the total amount of your delayed payments within the original loan term.
          • Extending the term - this will happen automatically, additional interest will be charged

            If you’re unable to make up your delayed payments within your original loan term, we’ll extend your term to cover these and the additional interest charged from extending your term.

            This on top of the extension from your first payment break means it could take you an additional eight to twelve months to pay back your loan – six months to cover the delayed payments, plus an additional two to six months to cover the interest from extending your term. The interest charged will be dependent on your loan term and APR.

            Please note, the additional payments required to cover the interest will never exceed your normal monthly payment amount. If the interest due is more than your normal monthly payment, this will be split across a number of payments until the balance is repaid.

            Once your Payment Break Extension has ended, we’ll send you a personalised breakdown of the interest and new repayments due.

          Here are some examples of how a Payment Break Extension might look for a loan over 5 years:

            Payment Break Extension

            Example 1 - £5,000 loan over 5 years

            Example 2 - £10,000 loan over 5 years

            Example 3 - £10,000 loan over 5 years

            Example 4 - £10,000 loan over 5 years

            Loan balance at the start of COVID-19 payment break

              £2,154

                £6,462

                  £8,616

                    £9,647

                      Loan balance excluding interest (the capital amount)

                        £2,089

                          £6,176

                            £8,116

                              £8,292

                                Annual interest rate

                                  3.00%

                                    3.00%

                                      3.00%

                                        7.90%

                                          Effective monthly interest rate

                                            0.25%

                                              0.25%

                                                0.25%

                                                  0.66%

                                                    Additional interest from COVID-19 payment break

                                                      £16 (£2,089 x 0.25% x 3)

                                                        £46 (£6,176 x 0.25% x 3)

                                                          £61 (£8,116 x 0.25% x 3)

                                                            £164 (£8,992 x 0.66% x 3)

                                                              Additional interest from Payment Break Extension

                                                                £16 (£2,089 x 0.25% x 3)

                                                                  £46 (£6,176 x 0.25% x 3)

                                                                    £61 (£8,116 x 0.25% x 3)

                                                                      £164 (£8,992 x 0.66% x 3)

                                                                        Total additional interest (from COVID-19 payment break + Payment Break Extension)

                                                                          £32

                                                                            £92

                                                                              £122

                                                                                £328

                                                                                  For illustrative purposes only. These examples assume there has been no payments made since the start of the payment break.

                                                                                  The additional payment break extension interest is calculated using the loan balance excluding interest at the start of the payment break extension. We multiply this amount by the effective monthly interest rate. This is then multiplied by three - the number of months in the payment break extension.

                                                                                    Will a Payment Break Extension impact my credit file?

                                                                                    No, your Payment Break Extension will not be reported as a missed payment to credit reference agencies. But bear in mind, though your credit file will not be directly impacted, lenders may look at other information – such as bank statements – when assessing credit applications.

                                                                                    You may receive letters from us notifying you of outstanding payments, for legal reasons we’re unable to stop these. Rest assured there is nothing you need to do about any ‘missed payments’ related specifically to your COVID-19 payment break or Payment Break Extension.

                                                                                      Can I make payments during this time?

                                                                                      If you’d like to make payments towards your loan during your payment break, no matter how small, you still can - it could help you pay your loan off quicker. You can do this online with Faster Payments using your Tesco Bank Loan sort code and account number.

                                                                                      Alternatively, you can make debit card payments on 0345 600 6016. We’re unable to accept payment by credit card.

                                                                                      Please note, to avoid being charged three months additional interest, you must pay the total amount of your delayed payments within the original loan term.

                                                                                        What happens after my Payment Break Extension?

                                                                                        When your Payment Break Extension ends we’ll just restart your Direct Debit and take the same monthly payments as before. If you cancelled your Direct Debit, we’ll reinstate this.

                                                                                        Remember you’ll still need to make your delayed payments, either by paying them off within your original term, or alternatively we will extend your loan term automatically to cover the delayed payment and the interest charged by extending your term.

                                                                                          Is a Payment Break Extension right for me?

                                                                                          You should take a moment to consider whether a Payment Break Extension is the best option for you.

                                                                                          If you anticipate struggling with your payments for any longer than three more months or you simply aren’t sure, this may not be the right option for you and should consider our options to support longer term difficulty.

                                                                                            Alternatively, you might want to talk to someone else

                                                                                            You can also get expert support from:

                                                                                            StepChange are a national charity providing free, personal debt advice over the phone or online. To find out more, visit Stepchange or call them on 0800 138 1111.

                                                                                            Citizens Advice offer free, independent and confidential advice on a wide range of issues, including money matters. Call their Advice line on 0344 411 1444 or visit Citizens Advice.

                                                                                            PayPlan are a trusted free debt advice provider. You can speak to one of their expert advisers on 0800 280 2816 or try their free online service.

                                                                                              Other things you might find helpful

                                                                                              Setting up Online Banking

                                                                                              Learn how to get set up and about our features

                                                                                              Setting up on our Mobile App

                                                                                              Get started with our Mobile App and features we can offer

                                                                                              Monthly bills too high?

                                                                                              Save money on your bills