COVID-19: What are the banks doing to help borrowers?

TL;DR

Major banks are offering deferment options for loan repayments, ranging from three to six months, to assist individuals impacted by job losses due to the coronavirus.

Transcript

g'day and welcome to the next video we've been trying to put together content that is relevant to what's happening at the moment to try to educate people and keep them informed as much as possible when it comes to finances and we need to move pretty quickly so previously we've always done one video a week but once we've got a topic that we think it... Read More

Key Insights

• 😄 Banks are implementing measures to ease the financial burden for individuals impacted by job losses due to the coronavirus.
• 👻 Deferment options range from three to six months, allowing individuals more time to manage their loan repayments.
• 🥺 Interest will still accumulate during the deferment period, leading to an extended loan term in most cases.
• 🏦 Communication with the bank is crucial for individuals seeking deferment options, and starting the process early is recommended.

Questions & Answers

Q: How long are the major banks deferring loan repayments for?

The Commonwealth Bank is deferring repayments for six months, while Westpac and NZ are offering three-month deferment options with the possibility of extension for another three months.

Q: Will interest still be charged during the deferment period?

Yes, interest will still accrue during the deferment period, and it will be capitalized and added to the loan, ultimately extending the loan term.

Q: Are these deferment options available for all types of loans?

Yes, the deferment options are available for both owner-occupiers and investors, whether their loans are on principal and interest or interest-only repayment terms.

Q: What is the recommended action for individuals seeking deferment options?

It is advised to contact your bank early and initiate discussions to ensure they are aware of your situation. Starting the process early and completing any necessary paperwork will help to ease the overall stress.

Summary & Key Takeaways

• Due to the global shutdown caused by the coronavirus, many people have lost their jobs, leading to financial distress.

• Major banks are implementing similar measures to support individuals by offering deferment options for loan repayments.

• The Commonwealth Bank is deferring repayments for six months, while Westpac and NZ are providing options for three-month deferrals with the possibility of extension after review.