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The banks have been really proactive in coming out and saying they’re going to support Australians as much as they can through this period. One of the ways that they’re helping and they’re showing that support is via their financial hardship agreements.
Now, all banks are different. They are calling them different things, they have different set of criteria and processes, but they all look something like this. They’re offering their customers either up to three months or up to six months of a repayment holiday. Now, what people need to understand is it doesn’t mean that your loan is getting turned off for a period of time. What’s actually happening is the interest that you owe is capitalising on top of your loan. So effectively, your loan is growing throughout that period. And then once the financial hardship agreement comes to an end, you would then make repayments and over the remaining long term, you would pay that extra interest off. So I can’t stress the importance of that enough.
It’s not a matter of just turning your loan off for six months, you are still paying for it, but ultimately the repayments are getting deferred for down the track. Rising Tide’s stance on these agreements is that they’re great initiatives from the banks. It’s going to help a lot of people through this period and it’s going to alleviate a lot of stress. Our stance on it, though, is not to enter into the agreement until you actually need it.
There’s other levers that we can pull to get us through a period of lower income and uncertainty, before we enter one of these agreements with the bank. However, if you do need to enter it, we are very supportive and we’re here to help you as much as we can. So please follow the link, lock in a time to chat to us and we’ll talk you through your specific set of circumstances and where to from here.