Financially stressed during COVID-19? You have options.
Worried about how you’ll manage your home loan repayments during the coronavirus outbreak? Many lenders are offering hardship options during this challenging time.
The economic impact of the coronavirus outbreak is evolving daily, if not hourly, across the Australian financial landscape.
Businesses have closed, jobs have been lost, and casual workers have had their hours slashed from work rosters.
If you’re one of the many Australians who have been affected – or are worried that you soon will be – rest assured that you can talk to your lender about hardship options without it affecting your credit report.
Here’s a statement released by Commonwealth Bank CEO Matt Comyn, for example:
“We encourage our retail customers who may be facing hardship due to impacts of the virus to contact us so that we can provide them with assistance, for example hardship options including deferral of loan repayments.”
What are some other options?
Before you rush head on into deferring your repayments, remember that this is not a free ride from the bank. The interest will be added to your loan and will increase your overall loan balance meaning over time you’ll pay interest on interest.
This may also have an impact on your ability to change banks to get a better deal in the future.
So if you don’t believe you need to seek financial hardship, but you’d still like a bit of extra breathing room, it may be worth considering refinancing or renegotiating your home loan instead.
There have been four rate cuts in the past year – including one last month that reduced the RBA’s official cash rate to a record low of 0.5%. And there are further whispers of an out of cycle rate cut over the coming days to help stimulate the economy.
And here’s the thing: lenders don’t automatically drop your repayments when the interest rate falls.
So if you haven’t asked your lender to reduce your home loan rate over the past year – or even the past month – then you may be able to reduce your monthly repayments by refinancing.
Get in touch
We understand that these are tough and uncertain times, yet rest assured we’re here for you no matter what lies ahead.
Please get in touch with us before entering any arrangement with your bank during this time. We can explore whether hardship or refinancing is the best option. We’re ready to assist you any way we can.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.