It is a fair question: if your company pauses payments, does it pay more in the end? In most cases a payment holiday does affect the schedule or the total cost, because interest continues to be treated in line with your agreement during the pause even though payments are not being made.
Why the cost can change
When scheduled payments pause, the balance is not reducing as quickly as planned for that period. Depending on how your facility is structured, this can mean a longer remaining term, slightly higher payments afterwards, or a higher total cost over the life of the facility. We do not quote figures here because the effect depends entirely on your own agreement and the length of the pause.
How to see the real impact
- Ask us to show the revised schedule before the holiday is agreed.
- Compare the new total against your original plan.
- Decide whether the short-term relief is worth the longer-term effect.
Making an informed choice
A payment holiday can be a sensible tool for a genuine, temporary gap, but it is rarely free. We will always set out the consequences clearly so your company can weigh up the trade-off before committing.
Facilities are available only to UK limited companies and LLPs for business purposes and fall outside the FCA consumer-credit regime.
See also: Can my company request a payment holiday?, How is my payment schedule set up? and What happens when payments resume after a pause?.