Hardship teams ready as loan deferrals end

·1-min read

Retail banks are setting up specialised hardship teams for customers who are unable to make reduced payments or restructure their loans.

Mortgage and business loan deferrals set up last year during the depths of the recession triggered by the COVID-19 pandemic are coming to an end.

New figures from Australia's largest banks show 91 per cent of deferred loans have resumed repayments, with just five per cent of business loans and 13 per cent of housing loans yet to resume.

The Australian Banking Association says while this is an encouraging sign of recovery, it is clear there are still Australians who need assistance to get through the pandemic.

The next phase of support will involve assistance from specialised hardship teams for customers who are unable to make reduced repayments or restructure their loans.

"This is about ensuring that no customer is left in the dark as we emerge from the pandemic," ABA chief executive Anna Bligh said in a statement.

"Every customer is different. Banks are taking a careful and measured approach that takes into account every customer's individual circumstances."

The hardship teams have extensive experience working with customers in financial difficulty due to the loss of a job, a relationship breakdown or many other common causes of financial difficulty.

Banks have developed an industry-wide, consistent approach to hardship and a new online tool to guide customers in financial hardship and improve transparency.

"At the beginning of the pandemic, all had the same fears about surviving financially and deferred their loans in the same way," Ms Bligh said.

"But the best thing for customers now is to tailor individual solutions on the way out of the crisis."

The Financial Assistance Hub can be found at www.ausbanking.org.au/assistance.