Now that we are in the "holiday season", people may be tempted to take a ‘payment holiday’ on loans to help ease financial pressure.

However, Financial Ombudsman Susan Taylor reminds consumers they may end up paying more in the long run.

“While payment holidays may offer short-term relief, interest added to the loan during the holiday period – and the longer time it will take to pay it off – might mean it’s just not worth reducing or deferring payments, in the longer term,” says Susan.

“Interest will continue to accrue while a repayment holiday is in place, so the borrower will wind up paying more money back to the lender in total.”

Susan says the term ‘payment holiday’ is not really a holiday – rather it is a loan deferral you’ll end up paying for. “It is also important for consumers to speak to their lender early if they are experiencing hardship.”

If something has gone wrong with a financial service provider, people can make a complaint to FSCL at: www.fscl.org.nz, call 0800 347 257, or email: complaints@fscl.org.nz