If your credit or loan repayments are getting out of control, talk to your customer-owned bank about your options.
Taking action straight away can stop a small problem from becoming a big one. There are a range of options to support you. While these will depend on your circumstances, it can include adjusting or deferring your repayments temporarily or varying your loan.
Customer-owned banks are committed to providing support for customers experiencing financial difficulty – you can read more about our sector’s commitments in the Customer Owned Banking Code of Practice.
Ask your lender for financial hardship assistance
The first step is to contact your customer-owned bank’s hardship team. Search for ‘hardship’ on your lender’s website. To find contact details for your credit union or mutual bank or building society, visit this page.
When you ask for help, your lender must consider you for hardship assistance.
Explain your situation
When you request financial hardship assistance, your customer-owned bank may ask you for information such as:
- the reason you are experiencing hardship
- your current income and other major financial expenses, such as other loans
- what repayments you can afford
Consider financial hardship options
Your customer-owned bank’s hardship team will assess your situation and work out what help is available.
Options can include setting up a payment plan or altering your loan repayments. This is called a ‘financial hardship arrangement’. Your arrangement may be temporary, like deferring a payment. Or permanent, like varying a loan.
You may be concerned about how a financial hardship arrangement will affect your credit score. It won’t affect your credit score. Your credit report will show you have an arrangement in place, without saying why. As long as you keep up with your agreed new payments, you’re shown as up-to-date. The listing is deleted after 12 months.
Make your financial hardship arrangement
When altering your loan repayments or negotiating a payment plan, only agree to an amount you can afford to pay.
If you find you can’t stick to the new arrangement, tell your customer-owned bank straight away. Keep paying what you can, even if it is not as much as you agreed to. Then negotiate a new arrangement you can afford.
Your lender must give reasons if they refuse your request for hardship assistance. If you’re not happy with their response, you can complain. In the first instance you should complain to your customer-owned bank.
Get more help if you need it
Talk to a financial counsellor
If you need help applying for financial hardship, contact a financial counsellor. This is a free and confidential service.
Call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.
Aboriginal and Torres Strait Islander peoples can call the free Mob Strong Debt Helpline on 1800 808 488.
Get debt management support
Call Way Forward on 1300 045 502. If you’re in financial hardship, they can arrange a debt repayment plan on your behalf. This is a free service.
Get mental health or emotional support
Call Beyond Blue on 1300 22 46 36.
This article includes information sourced from Moneysmart, an initiative of the Australian Securities and Investments Commission (ASIC) that offers a wide range of financial support and tools for Australians.