If your household has suffered the negative economic impacts of COVID-19, you are not alone, with increasing numbers of Australians seeking financial assistance for home and business loans
The latest statistics from the Australian Banking Association (ABA) found that more than 57,000 customers have received assistance with difficulties during the recent blockages in parts of Australia. The number of customers has almost tripled since last month, from 20,000.
Over 30,000 deferred loan payments were recorded for home and business loans. And it’s not just home and business loans that Australians struggle to afford, ABA’s statistics on ‘hardship assistance’ also include late credit card repayments and financial loss. exemption from fees and charges.
Unsurprisingly, New South Wales had the highest number of clients receiving assistance, with 57% of housing deferrals and 69% of business deferrals for NSW residents. In total, 88% of all deferrals are related to home loans, according to the ABA.
However, it remains significantly lower than the numbers recorded for hardship assistance in 2020, when more than one million home and business loans had to be deferred.
How homeowners can ask for help
Australian Banking Association chief executive Anna Bligh said: “While the majority of hardship approvals come from NSW and Victoria, clients are reminded not to toughen it up on their own no matter where they live. . “
“As closures continue to be extended to cities and states, it’s no surprise that more pressure is placed on people and businesses, but it’s important to remember that banks are there to help. “Ms. Bligh said.
“Over the past month, we’ve seen a substantial increase in the number of business owners who have raised their hands for help, and I encourage anyone feeling the pressure to do the same.
“Assistance is available to all small businesses and home loan clients heavily affected by current lockdowns or recovering from recent lockdowns, regardless of where they live or work,” she said. .
If you are currently unable to pay off your home loan, or if your regular income has declined and you will soon be unable to do so, it is worth talking to your lender as soon as possible.
Home loan lenders have practices in place to protect you from defaults due to worst-case scenarios like COVID-19, or even small-scale life changes like dismissal. Simply pick up the phone and call your lender and ask for information about their help in times of difficulty.
Just keep in mind that a mortgage payment deferral is not “free” and that by suspending your payments and not reducing your principal owed, you could end up paying more interest over the life of the loan. . Make sure you can budget for potentially higher repayments after the deferral is complete. Even if it’s only $ 20 more per month, it is on top of a 25 or 30 year home loan.