These are really concerning times and there is a whole lot of panic and fear around. The important thing here is to not let that fear consume us. There are ways through and around this, and we’re all in it together.
I want to share a word of warning around claiming financial hardship with your bank or lender. Please, only use it when it’s genuine hardship and you simply cannot make repayments.
Discuss reducing the repayments with the lender first. It’s likely that there will be other alternatives than to simply stop repayments. Maybe you could ask to switch to interest only without requiring reassessment.
Remember that claiming hardship under your current loan agreement is likely to attract a default rate of interest and impact your credit rating. Missed payments are now reflected on your credit history negatively and stay on your credit history for 24 months.
Make whatever payment you can and keep the lines of communication open with your lender.
If you have credit card debt, you could ask your bank if they can offer interest free credit card agreements.
The first thing you must do is understand your spending. If you can identify where you can make cuts, and then make them, that’s a great start. Secondly, communication is key. Keep your creditors informed of what’s going on. If they understand, they’ll work with you as much as they can. If they don’t, they’ll just penalise.
Finally, the Federal Government announced a COVID 19 Stimulus Package that you could benefit from. There are options to apply for the Coronavirus Supplement, household stimulus payments, temporary access to Super, plus support for retirees and employers. If you want to find out more, one of my colleagues has summed it up nicely in this article below.
Take care, stay safe, and please let me know if I can help.