#LOAN DEFAULT HOW TO#

You will be connected with a financial counsellor who can take a look at your overall financial situation and help you formulate a plan. If you'd like to discuss your situation with an independent third party, you can call the National Debt Helpline. 'What we find is 90 per cent of the time when a customer reaches out to us we can get them back on their feet within 90 days,' NAB personal bank executive Krissie Jones says.

#LOAN DEFAULT HOW TO#

Lenders are required to provide assistance to customers experiencing financial difficulty on a case-by-case basis.īanking apps and websites will contain information about how to contact their hardship teams and phone lines you can call. Who should you reach out to for assistance? Higher interest rates reduce borrowing capacity, so those with newer mortgages who borrowed near their maximum limit may struggle to access the same amount with a different bank. If you've already tried and failed to refinance and are having trouble keeping up with your repayments, this is a sign you should take some action. 'Before you're at the point where you can't make your repayments, and even if you're at the point where you think you might need to be asking for financial hardship assistance, you want to be considering your refinance option,' says April Blair, a senior ombudsman focused on financial difficulty at the Australian Financial Complaints Authority (AFCA). This would be a good time to try and secure a better deal - by asking your current bank for a lower interest rate or refinancing with another lender.

If you are yet to fall behind on your repayments, there will not yet be a mark against your credit score and it may leave you with more flexibility in terms of the options you have available. The message from everyone, from banks to financial counsellors, seems to be fairly uniform - get in touch early. So if you think you're going to have trouble making your increased repayments, here are some of the options you may have: When should you ask for help? After 12 interest rate rises since last May, home owners who have a mortgage are facing a steep rise in repayments.īorrowers are feeling the pain to varying degrees - if there are two more rate rises from here, an average borrower with a $750,000 home loan and 25 years left on the loan will be paying more than $1,900 more per month than before the rate hikes began, according to RateCity.

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