Today is the last day to apply for a payment holiday on mortgages, loans or credit cards

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TODAY is the last day for credit customers who are struggling financially to apply for a three month mortgage, credit card or loan payment holiday.

Lenders will stop offering the breaks from November meaning borrowers have until October 31 to apply for one.

Today is the last day for struggling borrowers to apply for a payment break

The temporary measures were introduced earlier this year to help households whose income has dropped due to lockdown restrictions.

The freezes can also be applied to insurance policies if you pay for them monthly, overdrafts, buy-now-pay-later, rent-to-own, car finance and pawnbroker loans.

Normally, payment breaks will be recorded on your credit file and can have a negative impact on any future borrowing, but earlier this year credit agencies agreed coronavirus freezes won’t be.

Extra help will still be available to those struggling from November 1 onwards but it will be tailored depending on individual circumstances and will be marked on their credit file.

It’s worth noting though that if you’ve already taken a three month payment holiday and you apply for a second on the same product before the deadline, the post-October 31 rules will apply meaning it will also be recorded on your credit history.

While it’s better than missing a payment without speaking to your lender first, Martin Lewis previously warned that you should only apply for a holiday if you really need it.

Borrowers still accrue interest throughout the break, which will cost them more in the long run as the balance will be higher than if they continued making the repayments.

For example, if someone paying £600 a month on a mortgage with a 12-year term left takes a three month holiday will typically need to repay the remaining balance over 11 years and nine months at a rate of £616 a month.

He said: “So if you don’t really need a three month holiday, don’t do it, or take a shorter break or make some voluntary repayments if you can.

“Yet if you’re struggling, do apply now and get the help you need.

“And with the deadline looming, my standard ‘only take it if you NEED it’ needs the addition of ‘or think you may really need it soon’, as future help is diminishing and these payment holidays are for most better than what will be available after October 31.”

MoneySavingExpert has previously warned that taking a payment break may actually stop you from getting a mortgage, even though it won’t affect your credit score.

It said that lenders can then see whether you’ve paused any payments through other methods, like Open Banking, which they can then use this information to decide whether or not they will lend to you.

There are fears that households are going to have to tighten their belts even further in the coming months as hundreds of thousands of workers are expected to lose their jobs when furlough ends.

A lack of tiered support for people who live in areas where there are tougher local lockdown restrictions is also expected to push millions of families into debt, Citizens Advice warned earlier this month.

October 31 marks the end of four other government-backed coronavirus help schemes, including furlough.

Interest-free overdrafts are also due to finish, while free childcare rules will come back.

A fifth of bosses expect to axe 10% of workers by the end of the year – with legal and health workers among those most at risk.