Option 1a
Interest only for 6 months (Capital repayment holiday)
If you expect to be in a better position to repay in the future, you can consider interest only for 6 months.
Features
- You could reduce your monthly repayments for six months by paying interest only.
- This option can be used up to three times during the term of your loan and can be used back-to-back i.e. for up to 18 months straight (in 3 standalone transactions of 6 months at a time).
Things to consider
- You can choose to extend the term of the loan by the duration of the interest only period (i.e. 6 months at a time) assuming this does not extend the total term of the loan beyond 10 years.
- If you choose this option without extending the term of your loan, you will repay the outstanding balance in larger instalments when you start making repayments again.
- Whether you extend the term of your loan or not, the total amount you owe will go up. This is because your interest costs increase as a larger amount of your loan is outstanding for longer/ you're repaying your loan over a longer period.
Illustrative examples
Prior to first scheduled interest or capital repayment
6 year term with 6-month payment holiday (no change in term)
| Loan value(capital) | Capital instalments | Final capital instalment | Total interest paid over the term | Total capital and interest payable |
|---|---|---|---|---|
| £35,000 | 53 x £648.14 | £648.58 | £2,446.35 | £37,446.35 |
Term extension to 10 years with 6 month interest only period
| Loan value(capital) | Capital instalments | Final capital instalment | Total interest paid over the term | Total capital and interest payable |
|---|---|---|---|---|
| £35,000 | 101 x £343.13 | £343.87 | £4,197.80 | £39,197.80 |
These illustrative examples are indicative, and payments may differ depending on the date the
loan is drawn down, capital holiday applied and if you have already commenced monthly repayments
on the loan. Remember you will still be required to make interest payments during the interest only period.
Option 1b
Payment holiday for 6 months
If you expect to be in a better position to repay in the future, you can consider a payment holiday for 6 months
Features
- You can choose to pause payments (both capital and interest) on your Bounce Back Loan for a period of 6 months.
- This option is only available once during the term of your Bounce Back Loan.
- You can use this option back-to-back with the interest only option.
Things to consider
- You can choose to extend the term of the loan by the duration of the payment holiday (6 months) as long as this does not extend the total term of the loan beyond 10 years.
- If you choose this option without extending the term of your loan, you will repay the outstanding balance in larger instalments when you start making repayments again.
- Whether you extend the term of your loan or not, you'll accrue more interest, so the total amount repayable would increase, unless you repay early.
Illustrative examples
Prior to first scheduled interest or capital repayment
6 year term with 6-month interest only period (no change in term)
| Loan value(capital) | Capital instalments | Final capital instalment | Total interest paid over the term | Total capital and interest payable |
|---|---|---|---|---|
| £35,000 | 53 x £655.50 | £655.96 | £2,471.45 | £37,471.45 |
Term extension to 10 years with 6-month payment holiday
| Loan value(capital) | Capital instalments | Final capital instalment | Total interest paid over the term | Total capital and interest payable |
|---|---|---|---|---|
| £35,000 | 101 x £347.03 | £347.43 | £4,242.75 | £39,242.75 |
These illustrative examples are indicative, and payments may differ depending on the date the
loan is drawn down, capital & interest holiday applied and if you have already commenced monthly repayments on the loan.
Option 2
Term extension to 10 years
If you're only able to repay a smaller amount each month, you have the option to extend the term of your loan.
Features
- You can request an extension of your loan term from 6 years to 10 years at the same interest rate of 2.5%.
- Your monthly repayments will reduce, however the total amount you owe will increase. This is because your interest costs increase as you're repaying your loan over a longer period.
- If you're considering this option you should think carefully about your ability to repay over a longer timeframe. For example, if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
Illustrative examples
Prior to first scheduled interest or capital repayment
Term extension to 10 years
| Loan value(capital) | Capital instalments | Final capital instalment | Total interest paid over the term | Total capital and interest payable |
|---|---|---|---|---|
| £35,000 | 107 x £324.07 | £324.51 | £3,978.86 | £38,978.86 |
This illustrative example is indicative, and payments may differ depending on the date the loan is
drawn down and if you have already commenced monthly repayments on the loan.
