The COVID-19 loan deferral program and credit reporting amnesty is now over, which means banks will report any late repayments on mortgage or small business loans to credit agencies unless you have entered into a hardship arrangement.
The banks’ mortgage deferral program and subsequent credit score reporting amnesty officially ended on April 1 2021
The package was created during the peak of COVID-19 to provide loan repayment relief for almost one million home and business loan borrowers facing financial hardship
Luckily, many people have since been able to resume their repayments – as of late February, just 2,803 small business loans (1.2%) and 22,480 housing loans (5%) were still deferred, figures show.
But we are not out of the woods yet
The JobKeeper wage subsidy scheme has also just officially ended, which has the potential to put tens of thousands of households and businesses at risk once more.
Will you be impacted by JobKeeper payments ending?
Latest reports indicate up to 150,000 workers could lose their jobs this month due to JobKeeper payments ceasing
If your ability to repay your home or small business loan might be affected in the months ahead, then it’s important to act now, rather than wait until after you’ve missed a repayment.
The reason being because by then it could be too late and your late repayments may end up on your credit file, which will greatly impede securing finance in the future
Your most appropriate course of action, however, will depend on your individual circumstances, which we’ve broken up into two categories below.
Category 1: Repayments will be tight, but possibly doable
If your upcoming loan repayments are looking tight, but possibly doable, then get in touch with us today to discuss some financing options that might make your repayments more manageable.
These options might include:
– renegotiating your rate with your current lender,
– refinancing to another lender,
– debt consolidation, or
– a combination of these and other measures
Category 2: You don’t think you’ll be able to make your repayments
If you’ve lost your job due to JobKeeper ending, for example, and the chances of making your repayments are looking a little grim, then it’s important to get in touch with your lender today to discuss entering into a hardship arrangement.
Not only will this potentially give you some breathing space on your repayments, but it will help keep any missed payments off your credit file, as the Australian Banking Association states below:
“For customers that enter into another form of hardship or forbearance arrangement with their bank, banks will not report the repayment history information. Instead, they will leave the field blank for the duration of the arrangement.”
If you’d like to discuss any of the above in further detail please get in touch today – we’re here to help any way we can.