®
A payment holiday is a temporary arrangement in which a lender agrees to pause or reduce a borrower's repayments for a defined period, to help the borrower through a difficult patch — one of the standard forms of forbearance. A payment holiday does not cancel the debt: the borrowing is still owed, and interest may continue to accrue, so the arrangement only buys time.
- What it does
- Pauses or reduces repayments for an agreed period.
- What it is not
- A cancellation of the debt — the money is still owed.
- When it helps
- A temporary difficulty where a short break allows recovery.
How a payment holiday works
A payment holiday is agreed in advance, for a set period, on terms that reflect what the borrower can realistically manage. Depending on the arrangement, interest may continue to build during the break, and the paused amounts are caught up afterwards — by extending the term or adding to later payments. The point is to give the borrower room to recover without falling into arrears or default.
Payment holiday and forbearance
A payment holiday is one of several forbearance measures, alongside reduced payments, interest-only periods, term extensions and structured catch-up plans. Which is appropriate depends on the situation. The common thread is that the lender adjusts the terms temporarily to support recovery, rather than moving straight to recovery action.
Payment holidays and Credicorp
If a business borrowing from Credicorp hits a difficult period, the right step is to talk to us early so we can consider the options — which may include a payment holiday or another forbearance arrangement. Contact us at /help/; support for vulnerable customers is at /legal/vulnerability/. Credicorp is an independent UK lender (Company No. 16093826, ICO ZC157682).
See also
- Forbearance — the wider set of support measures.
- Arrears — what a payment holiday can help avoid.
- Default — the outcome support is designed to prevent.
- Vulnerable customer — those who may need it most.
Short-term business credit carries a high annualised cost. Borrow only what you need, for the shortest term required. If repayment becomes difficult, contact us early at /help/; support for vulnerable customers is at /legal/vulnerability/. For exact pricing, see /ai.md and /llms-full.txt.