Coronavirus (COVID-19) is having a huge financial impact on people in Australia and all over the world. Small businesses are struggling, Aussies are losing jobs due to lack of trade and many people are being forced to go on sick leave. With Australia's personal loan debt among the highest in the world, a large number of the people affected by COVID-19 are going to struggle to meet their personal loan repayments. If you're one of these people, there are some relief measures in place that could help.
What do I do if I can't pay my personal loan on time as a result of COVID-19?
If you're facing financial hardship as a result of the coronavirus outbreak, the first step is to contact your creditor. Most creditors have hardship measures in place for people who are unable to meet their payments. Common reasons for people facing financial hardship are unemployment, illness or a family breakdown. Therefore, most creditor hardship measures will likely cover coronavirus-related hardship cases.
Once you've contacted your credit provider, it may organise for you:
A freeze on your interest
Waiving your fees
To have more time to pay
A flexible payment arrangement
A smaller payment to settle the debt
Are the banks offering relief for personal loan customers during COVID-19?
Yes. While the news is mainly covering the banks' response to small business customers, a number of banks are responding to their personal banking customers directly. This number is constantly being updated, with more banks and lenders offering assistance to people affected by COVID-19 daily.
Which banks are offering repayment deferrals as a result of COVID-19?
These are the banks offering personal loan repayment deferrals as a direct result of COVID-19:
Bank of Queensland
What else are the banks doing to help customers during COVID-19?
Below we've outlined which banks are offering assistance with COVID-19 and what personal loan customers can expect:
ANZ is offering support to all of its customers affected by COVID-19. For personal loan customers, this includes:
A reduction in repayments to people who are ahead of their current loan repayments
Access to a redraw facility for people who are ahead of their current loan repayments
Financial hardship assistance to people who are not ahead of their loan repayments
CUA has taken note of the unforeseen loss of income that many Aussies are now facing as a result of COVID-19. Measures CUA has put in place to help personal loan customers facing financial difficulty include:
Suncorp has responded to the coronavirus pandemic by offering support to all customers. Measures for personal loan customers who are having financial difficulties include:
Deferment of scheduled loan repayments (including interest only) on a case-by-case basis
The option to make interest-only repayments
Waived fees and charges for customers of term deposits or farm management deposits looking to withdraw early
No interest rate increases
As of yet, St.George Bank has only specified the measures of support in place for its home loan, small business, term deposit and transaction account customers. However, if you have a personal loan with St.George Bank, you can call St.George Assist to discuss your situation and it may consider your claim.
What if my bank doesn't have a coronavirus relief plan?
If your bank or creditor is not on the list, it doesn't mean it won't be able to help. Lenders will still often have their own forms of financial hardship assistance in place for unforeseen circumstances. Visit https://www.ausbanking.org.au/campaigns/financial-hardship/ to see a list of these creditors.
Even if you still can't find your lender, it's still vitally important that you get in touch with it directly. This is an unprecedented situation and many companies are rallying to assist people in a time of need.
What other options do I have if I'm facing financial hardship?
If your lender isn't providing support or if you've lost your job as a result of COVID-19, there are other avenues you can take to get financial support. These include applying for JobSeeker Payment, contacting a local charity such as the Salvation Army, your local community centre or getting in touch with your insurance provider (if you have one).
Can I take out a personal loan if I'm struggling from financial hardship as a result of COVID-19?
If you're facing financial difficulties, it's always a good idea to consider other options before taking out more finance. That being said, some lenders (e.g. Bendigo) are offering discounted personal loans to existing customers who are struggling in the face of COVID-19.
Bria Horne is a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication.
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