A payment holiday is when you take a short break from paying back your loan. The payment holiday needs to be agreed with your lender. You may need a payment holiday if you’ve lost your job, taken maternity leave or received unexpected bills to pay.
You’ll continue to be charged interest if you take a payment holiday and you’ll still have to pay back the loan at a later date. Your monthly repayments may also go up after the agreed payment holiday is over – check the terms with your lender.