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What you need to know before you defer your loan repayments during COVID-19

Deferring your loan repayments can ease financial strain, but what conditions apply?

Updated

Fact checked

If you've been impacted by COVID-19, you might be looking into different ways you can reduce your expenses. One big expense is loan repayments. Banks and lenders have announced measures to help people and businesses with loans get through the coronavirus period, but it's important to know the conditions that apply to the measures and whether they are the best option for you.

In this guide, we will go through what measures have been announced regarding loan repayments, what conditions are attached and how to decide if they are right for you.

What measures have banks and lenders introduced for loans?

Business loans

The Australian Banking Association and the banks are working together during the crisis to implement the Small Business Relief Package. This package will allow principal and interest repayments for loans to small businesses that have been affected by COVID-19 to be deferred. The package applies to all term loans and retail loans up to $3 million and will be available to loans from all ABA member banks who have agreed to participate.

Home loans

Banks are offering their customers individual support if they have been impacted by the coronavirus crisis. For example, NAB is letting its customers defer repayments for up to six months while Westpac is letting customers defer repayments for up to three months. You can find out more information on mortgage assistance during COVID-19 here.

Personal loans

Similar to home loans, banks are offering their customers support through individual policies. This includes fee waivers, debt consolidation, interest-only repayments and more. You can find out more about individual bank policies on personal loan support during coronavirus here.

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What is the impact of deferring your loan due to COVID-19?

This differs between lenders, but generally, you will be impacted by the following if you choose to defer your loan repayments:

  • Your repayment term will be longer. If you defer your loan repayments for six months, banks are generally adding six months onto the end of your loan term. So, it will take you longer to repay your loan.
  • You will pay more in fees and interest. While you aren't paying fees and interest during the deferral period, most banks and lenders have said they will add these deferred fees and interest payments back onto the loan when you start making your repayments again. Also, because your loan term is longer, you will be paying interest and fees for longer.

What conditions apply to the deferral of loans?

LenderLoan typeConditions
ANZHome loansInterest will continue to be capitalised during the six-month deferral period. After this, you can increase the loan amount or extend your loan period by six months.More info
ANZBusiness loansInterest is capitalised during the six-month deferral period.
CommBankBusiness loansFees and interest payments are added to the loan after the six-month deferral period.
CommBankHome loans
  • Interest and fees will be added to the loan balance.
  • Any available redraw will be drawn during the six-month support period.
More info
NABBusiness loansInterest will continue to accrue during the six-month deferral period.
NABPersonal loansYou can reduce your repayments but interest will continue to accrue and you'll be required to repay it over the remaining term.More info
NABHome loansInterest will continue to accrue during the six-month deferral period. After this period, your repayment amount may need to change so you can repay it within the loan term.More info
St.GeorgeHome loansAfter the three-month deferral period, the deferred interest and principal payments will need to be paid off during the remainder of your loan term.More info
St.GeorgeBusiness loans and credit cards
  • Interest on business loans continues to accrue during the deferral period.
  • Business credit card interest will be charged at a reduced rate of 9.46% p.a.
WestpacBusiness loans and credit cards
  • Deferred interest on business loans will be capitalised and extend the term of your business loan six months.
  • Business credit card interest will accrue at a reduced rate of 9.46% p.a.
More info
WestpacHome loansDeferred interest will be capitalised and your principal will need to be paid off after you resume your repayments.More info

How to decide whether to use a coronavirus support measure

The ongoing COVID-19 crisis is stressful and the measures introduced by banks can be a welcome financial relief. However, there are a few things to consider before deciding whether to take them on:

  • Can you afford higher loan repayments? Some banks, as detailed in the table above, require that you cover the missed fees and interest payments by increasing your ongoing loan repayments. You need to consider whether this will be a feasible option for you at the end of the six-month period.
  • How long will it take you to get back on your feet? The loan deferral periods differ between banks, but at the end of these periods, all require that you start making principal and interest repayments again. You should look at your personal or business situation and decide whether making these repayments will be possible.
  • Is there another way you can make the repayments? Make sure you have explored all other avenues before considering loan deferrals. There are government grants to help businesses affected by the coronavirus and other cash-flow boosting strategies you can consider.

Need to refinance?

If you're struggling with your repayments, refinancing your loan could be an option. When you choose to refinance your loan, you may be eligible for a lower interest rate. This may decrease your monthly repayments over the entire loan term.

Compare your loan refinance options below.

Data indicated here is updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Valiant Finance Business Loan Broker
$5,000
$1,000,000
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Prospa Business Loan
$5,000
$300,000
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.
Max Funding Unsecured Business Loan
$2,000
$300,000
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment fees.
OnDeck Business Loans
$10,000
$250,000
6 months to 2 years
3% of loan amount
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
ANZ Secured Business Loan
$10,000
$10,000,000
Up to 15 years
$600
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
Westpac Business Loan
$5,000
$1,000,000
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
ANZ Unsecured Business Loan
$10,000
$1,000,000
Up to 15 years
$600
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.
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Data indicated here is updated regularly
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
NAB Personal Loan Unsecured Fixed

From 9.99% (fixed)
10.88%
$5,000
1 to 7 years
$150
$10
You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.
RateSetter Unsecured Fixed Personal Loan

From 6.49% (fixed)
6.84%
$2,001
3 to 5 years
From $149 to $399
$0
You'll receive a fixed rate between 6.49% p.a. and 12.79% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 3 years. Interest and comparison rates calculated for a loan term of 5 years.
Harmoney Unsecured Personal Loan

From 6.99% (fixed)
7.79%
$2,000
3 to 5 years
$575 ($275 for loans of below $5,000)
$0
You'll receive a fixed rate between 6.99% p.a. and 25.69% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.
Symple Loans Personal Loan

From 5.75% (variable)
6.47%
$5,000
1 to 7 years
from 0% to 5% of the loan amount
$10
You'll receive a personalised interest rate from 5.75% p.a. to 21.99% p.a. based on your risk profile
Borrow up to $50,000 to pay for what you need.
RateSetter Unsecured Variable Personal Loan

From 6.49% (variable)
7.49%
$2,001
1 to 2 years
From $149 to $299
$0
You'll receive a variable rate from 6.49% p.a and 12.29% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 12 months. Benefit from transparent costs and a rate estimate before you apply.
Wisr Personal Loan

From 7.95% (fixed)
8.78%
$5,000
3 to 5 years
$595 (Establishment Fee)
$0
You'll receive a fixed rate between 7.95% p.a. and 19.45% p.a. based on your risk profile
A loan from $5,000 that charges no fees for extra or early repayments. Keep in mind security is required in some cases.
SocietyOne Unsecured Personal Loan

From 7.50% (fixed)
9.51%
$10,000
2 to 5 years
from 3% of loan amount
$0
You'll receive a fixed rate between 7.50% p.a. and 20.49% p.a. based on your risk profile
A loan from $10,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
SocietyOne Unsecured Personal Loan

From 7.50% (fixed)
9.51%
$5,000
1 to 7 years
$300 (Based on $10,000)
$0
You'll receive a fixed rate between 7.50% p.a. and 20.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
ING Personal Loan
8.99% (fixed)
9.13%
$5,000
2 to 5 years
$100
$0
You'll receive a fixed rate of 8.99% p.a.
Benefit from no ongoing fees, no early repayment fees and flexible loan terms on amounts up to $30,000.
CUA Unsecured Fixed Rate Personal Loan
9.89% (fixed)
10.14%
$5,000
1 to 7 years
$175
$0
You'll receive a fixed rate of 9.89% p.a.
An unsecured loan from $5,000 with flexible repayments and no monthly fee.
NAB Personal Loan Unsecured Variable Rate

From 9.99% (variable)
10.88%
$5,000
1 to 7 years
$150
$10
You'll receive a variable rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes. Benefit from fee-free additional repayments and a redraw facility. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.
CUA Discount Variable Personal Loan (Loans over $30,000)
10.89% (variable)
11.15%
$30,000
1 to 7 years
$175
$0
You'll receive a discounted variable rate of 10.89% p.a.
Borrow over $30,000 and receive a discounted interest rate. No monthly fees and a redraw facility also available.
OurMoneyMarket Personal Loan

From 7.99% (fixed)
8.46%
$2,001
1 to 7 years
1.5–6% of your total loan amount
$0
You'll receive a fixed rate from 7.99% p.a. to 25.25% p.a. based on your risk profile
A personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.
CUA Unsecured Variable Personal Loan
11.89% (variable)
12.15%
$5,000
1 to 7 years
$175
$0
You'll receive a variable rate of 11.89% p.a.
Borrow from $5,000 with the option for flexible repayments and no monthly fees.
MoneyPlace Unsecured Personal Loan

From 7.65% (fixed)
7.65%
$5,000
3 to 7 years
0% to 5.5% of loan amount, capped at $950
$0
You'll receive a fixed rate between 7.65% p.a. and 26.99% p.a. based on your risk profile
A no-frills personal loan that you can use for any purpose. Loan amounts available up to $50,000 and early repayments allowed.
Liberty Personal Loan

From 7.65% (fixed)
7.65%
$5,000
3 to 7 years
0% to 5.5% of loan amount, capped at $950
$0
You'll receive a fixed rate of 7.65% p.a. to 26.99% p.a. based on your risk profile
Apply for a credit limit from $5,000 to $50,000 on terms from 3 to 7 years and pay no ongoing fees or charges.
Easy Street Fixed Rate Personal Loan
8.99% (fixed)
9.27%
$5,000
1 to 5 years
$195
$0
You'll receive a fixed rate of 8.99% p.a.
Borrow between $5,000 and $35,000 on terms from 1 to 5 years. No deposit, monthly fees or security needed.
People's Choice CU Discounted Personal Loan

From 7.99% (fixed)
8.35%
$10,000
1 to 10 years
$250
$0
You'll receive a fixed rate of 7.99% p.a. for 5 years
Secure this loan with a vehicle up to 7 years old and benefit from long loan terms up to 10 years and pre-approval.
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Data indicated here is updated regularly
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
Loans.com.au - New and Dealer Used Car Loan
From 4.67% (fixed)
5.22%
$5,000
3 to 5 years
$400
$0
You'll receive a fixed rate from 4.67% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment. Note: Settle the loan before 30 November 2020 and enter the draw to win a $1,000 fuel voucher. Terms & conditions apply.
IMB New Car Loan
5.45% (fixed)
5.8%
$2,000
1 to 7 years
$275.12 ($250 Application fee + $25.12 PPS registration fee)
$0
You'll receive a fixed rate of 5.45% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
Stratton Finance New Car Loan
From 4.05% (fixed)
5.63%
$10,000
3 to 7 years
$700
$8.25
You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $250,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Credit Concierge Car Loan
From 4.45% (fixed)
5%
$10,000
1 to 7 years
$350
$0
You'll receive a fixed rate of 4.45% p.a. with a comparison rate of 5% p.a.
Get access to over 20 providers to fund a new or used car.

Beyond Bank Low Rate Car Loan
4.89% (fixed)
5.16%
$25,000
1 to 7 years
$175
$0
You'll receive a fixed rate of 4.89% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
CUA Secured Fixed Car Loan
6.79% (fixed)
7.16%
$5,000
1 to 7 years
$265 ($175 Establishment Fee + $90 Security Administration Fee)
$0
You'll receive a fixed rate of 6.79% p.a.
A secured loan with a high maximum borrowing amount up to $100,000. Redraw facility and no monthly fees.
Driva Car Loan
From 4.34% (fixed)
5.5%
$2,000
1 to 7 years
$295 (Varies by lender, starting from $295)
$10
You'll receive a fixed rate from 4.34% p.a.
Borrow up to $250,000 with loan terms from 1 to 7 years. Get access to a range of lenders.
IMB Secured Personal Loan
6.45% (fixed)
6.8%
$2,000
1 to 5 years
$275.12 ($250 Application fee + $25.12 PPS registration fee)
$0
You'll receive a fixed rate of 6.45% p.a.
Benefit from this competitive rate by securing the loan with a vehicle up to 6 years old. Use this flexible loan for any purpose.
RateSetter Car Loan
From 4.89% (fixed)
5.44%
$10,000
3 to 7 years
$399 (from $249 to $799)
$0
You'll receive a fixed rate from 4.89% p.a.
Borrow up to $100,000 with a RateSetter Car Loan and benefit from no early repayment or exit fees.
NRMA New Car Loan
From 5.69% (fixed)
6.39%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 5.69% p. a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
MOVE Bank New Car Loan
Finder Award
MOVE Bank New Car Loan
4.89% (fixed)
5.16%
$10,000
1 to 7 years
$195
$0
You'll receive a fixed rate of 4.89% p.a.
Take advantage of a competitive rate, no ongoing fees and the flexibility to redraw and make extra repayments with no penalties.
NRMA Used Car Loan
From 6.99% (fixed)
7.7%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 6.99% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
People's Choice CU Discounted Personal Loan (Car Loan)
From 4.65% (fixed)
4.99%
$20,000
1 to 10 years
$250
$0
Borrow over $20,000 and secure with a new or used car less than 2 years (manufacture year 2018).
Pre-approval, no monthly fees and fixed rate for 5 years.
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