Banks implement next stage of COVID-19 loan deferrals

In this next phase of the banks' COVID-19 deferral offer, customers who can restart paying their loans will be required to do so at the end of their six-month deferral period. 

“Those who are able to repay their loans will resume doing so, which is in the best interests of those customers and allows support to be directed to those who need it. Encouragingly, many customers have already chosen to resume making repayments” said ABA chief executive Anna Bligh.

However, customers with reduced incomes and ongoing financial difficulty due to COVID-19 will be contacted as they approach the end of their deferral period, to ensure that wherever possible they can return to repayments through a restructure or variation to their loan. If these arrangements are not in place at the end of a six-month deferral, customers will be eligible for another extension of their deferral for up to four months. 

The ABA explained that a deferral extension of up to four months will not be automatic, it will be provided to those who genuinely need some extra time.  

The agency also noted that if, during or at the end of any deferral, customers continue to be severely financially impacted and are unable to make repayments, they will be assisted through their bank’s hardship process to determine the best long-term solution for their individual circumstances.

To date, over 800,000 Aussies have deferred their repayments throughout this crisis.

“To meet demand, banks have deployed over 5,000 extra frontline staff who will proactively contact and work with customers to find the right solution, but please be patient with bank staff as we enter this next phase,” said Ms Bligh.

“This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially.”