Banks offer loan deferrals as lockdowns continue

More than 20,0000 customers have received hardship assistance during recent lockdowns, including just over 15,000 repayment deferrals on home and business loans.

Since 8 July 2021, more than 14,500 home loans have been deferred, while more than 600 business loans have been deferred. Comparatively, during the peak of the crisis in 2020, almost 500,000 home loans and more than 225,000 business loans were deferred.

Anna Bligh, Chief Executive Officer of the Australian Banking Association reminded customers not to tough it out on their own.

“Lockdowns continue to bite across several states, and banks are again stepping up to help,” Ms Bligh said.

“Support is available to all small businesses and home loan customers significantly impacted by current lockdowns or recovering from recent lockdowns, irrespective of geography or industry.”

ABA CEO Anna Bligh

“Support is available to all small businesses and home loan customers significantly impacted by current lockdowns or recovering from recent lockdowns, irrespective of geography or industry.”

Hardship approvals and loan deferrals are heavily skewed toward NSW residents, due to the continued lockdown. Banks report many calls for assistance in NSW came from business and families affected by the recent shutdown of the construction industry.

NSW home loan deferrals account for more than two thirds of total deferrals, while almost 80 per cent of deferred business loans are also from NSW.

The number of customers accessing hardship grew by 73% this week, compared with a growth of 153% the week before. Growth in housing loan deferrals similarly slowed from 344% to 79%. While growth in business loan deferrals grew from 93% to 108%.

Banks have dedicated hardship teams who stand ready to listen and consider a range of options that suit customers’ circumstances. Almost 24,000 people since early July have accessed a range of support measures offered by their bank and 64% of these have opted to defer their loan repayments for up to 3 months.

“Given the lockdown situation in South East Queensland, banks stand ready to assist customers who need help”, Ms Bligh said.

“The sooner you talk to your bank, the sooner they can help you find a solution that is right for you”.

Support

Support for customers in need across Australia continues to be available. On application, the support includes:

Business banking repayment deferrals:

  • Up to 3 month repayment deferrals, with loan terms extended accordingly
  • Offered to all small business customers (business lending less than $3m and a turnover of less than $5m), which includes up to 98% of small businesses
  • Only for loans in good standing (i.e. repayments up to date or engaged in a payment program with their bank)

Everyday banking support

  • Refunds of merchant terminal fees for up to 3 months
  • Waiving of fees and notice periods on Cash Deposit and Farm Management Deposit accounts for up to 3 months

Home loan support

  • Range of support measures, including deferrals on a month by month basis
  • Available to both individual and business customers

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