Extending Loan Deferrals During COVID-19

Tuesday, August 11th, 2020

The recent announcement that customers who are still experiencing financial struggles as a result of COVID-19 will be given an extension of four more months to start paying back loans, is a welcome relief for many Australians.

But for clients currently managing their own unique financial stress, it’s important to educate them that these deferrals are not automatic.

Key points to understand about loan deferrals:

Changes to Wage Subsidy Schemes and How It Impacts Loans

The Federal Government’s recent announcement about changes to the economic support offered by JobKeeper and JobSeeker wage subsidy  schemes will see some Australians economically worse-off, after September, while for those working in other industries less affected by lock-down laws, incomes may return to pre-pandemic normal soon.

Negotiating New Loan Terms Can Help Relieve Financial Stresses

Options available to those who are still experiencing financial difficulty could include loan-restructuring, extending loan lengths, conversion to interest-only repayments for a defined time-frame, or other avenues of debt consolidation.

With the Australian Prudential Regulation Authority committed to easing regulations on the banks, it is clear financial institutions are being encourage to support customers through what looks set to be some tough times still ahead and for customers feeling that financial stress, open communication with your lender or loan broker, is the smart way to tackle the issue before it becomes a bigger problem.

For the latest information about loan deferrals and how to manage your loans, talk to our loan-broking specialists at Loans Actually today.

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