Loan Repayment Deferral Extension In September

A few months ago, we did not expect how the world looks like today, especially Australians. Until the end of July, the Unemployment rate increased to 7.5%. The cost to Victoria during the second lockdown is up to $1 billion a week, and that will fall heavily on businesses.

𝐋𝐨𝐚𝐧 𝐑𝐞𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐃𝐞𝐟𝐞𝐫𝐫𝐚𝐥 𝐄𝐱𝐭𝐞𝐧𝐬𝐢𝐨𝐧 𝐢𝐧 𝐒𝐞𝐩𝐭𝐞𝐦𝐛𝐞𝐫 Therefore, banks announced the next stage of support for bank customers, who are ‘still’ struggling financially due to COVID-19. Customers will be contacted towards the end of the six-month deferral scheme, which 𝐞𝐱𝐩𝐢𝐫𝐞𝐬 𝐢𝐧 𝐒𝐞𝐩𝐭𝐞𝐦𝐛𝐞𝐫 to work out whether they can restructure or vary their loan, and may be eligible for an extension of their deferral of up to four months. That could include extending the length of the loan, converting to interest-only payments for a period of time or consolidating their debt.

Extensions will 𝐧𝐨𝐭 𝐛𝐞 𝐚𝐮𝐭𝐨𝐦𝐚𝐭𝐢𝐜, and customers will need to apply for the extended grace period. At the same time, those who can afford to start repaying their mortgage or business loan will be expected to do so once the initial six-month deferral period expires in September.

We would generally suggest any client uncertain about your future financial situation or those who have been hanging on up until this point to get in contact with the bank and discuss the options that might be available for you.

𝐅𝐀𝐐𝐬

𝑊ℎ𝑎𝑡 𝑑𝑜𝑒𝑠 “𝑙𝑜𝑎𝑛 𝑑𝑒𝑓𝑒𝑟𝑟𝑎𝑙” 𝑚𝑒𝑎𝑛?

- If you are experiencing financial difficulty due to COVID-19, you may be able to put your home loan repayments on hold for up to six months, but interest will continue to be charged on your loan during this period. You will not be required to make any repayments to your home loan during the assistance period.

𝐴𝑚 𝐼 𝑒𝑙𝑖𝑔𝑖𝑏𝑙𝑒 𝑓𝑜𝑟 𝑎 𝑟𝑒𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑝𝑎𝑢𝑠𝑒?

These support measures are designed for anyone who:

- Has lost their job

- Has closed their business due to the lockdowns

- Is experiencing a loss of income

- Has had their financial situation detrimentally impacted as a result of COVID-19

𝐼𝑠 𝑡ℎ𝑒𝑟𝑒 𝑡ℎ𝑒 𝑒𝑥𝑡𝑒𝑛𝑑𝑒𝑑 𝑙𝑜𝑎𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 𝑎𝑝𝑝𝑙𝑖𝑒𝑑 𝑡𝑜 𝑃𝑒𝑟𝑠𝑜𝑛𝑎𝑙 𝐿𝑜𝑎𝑛 & 𝐶𝑟𝑒𝑑𝑖𝑡 𝐶𝑎𝑟𝑑?

- Unfortunately, the extra four months only apply for business and mortgage loan. However, every bank has a different support option so you can contact your bank for further information regarding the assistance for Personal Loan and Credit Card.

𝑊𝑖𝑙𝑙 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑠𝑡𝑖𝑙𝑙 𝑎𝑝𝑝𝑙𝑦?

- Interest still accumulates on your loan during this period increasing your loan balance at the end of the deferral period.

𝑊ℎ𝑒𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑓𝑜𝑢𝑟-𝑚𝑜𝑛𝑡ℎ 𝑙𝑜𝑎𝑛 𝑑𝑒𝑓𝑒𝑟𝑟𝑎𝑙 𝑏𝑒𝑔𝑢𝑛?

- If you’ve already deferred repayments during the coronavirus pandemic which will expire in September, you can extend further four-month until the beginning of 2021.

𝑊ℎ𝑎𝑡 𝑜𝑝𝑡𝑖𝑜𝑛𝑠 𝑐𝑎𝑛 𝐼 𝑔𝑒𝑡?

Depending on your circumstances, banks will discuss and find the best options to restructure or vary your loan. Options may include:

- Extending the length of the loan

- Converting to interest-only payments for a period of time

- Consolidating debt

- A combination of these and other measures

- Determining alternative fund sources

- Hardship assistance

- Further deferral for up to four months

If you have any concern that this change will affect your loan application, please do not hesitate to contact us.

Kind regards,

𝐾𝑖𝑒𝑛 𝑃ℎ𝑎𝑛 & 𝑃ℎ𝑢𝑜𝑛𝑔 𝑁𝑔𝑢𝑦𝑒𝑛.