COVID -19 changes: Making repayment arrangements

The Coronavirus (COVID-19) pandemic is a challenging time for everyone in Australia (and the world). This is a guide for making repayment arrangements if you have been financially impacted by the pandemic.

This page is about steps you can take to look after yourself and your family financially during the COVID-19 pandemic

Information on this page:
Please click the links below to visit each section

Download PDF

Four changes you need to know about

  1. Many banks and other lenders will continue to be flexible in assisting customers financially impacted by COVID-19.
  2. The type of options which may be available to you will depend on who your lender is and your personal situation. They will be assessed on a case-by-case basis.
  3. Debt collection activity has resumed and the temporary measures that were in place to protect people from being forced into bankruptcy ended 1 January 2021. See COVID 19 changes: Bankruptcy.
  4. The Australian Financial Complaints Authority (AFCA), which is the free dispute resolution body, has a significant event hotline 1800 337 444 for individuals financially impacted by the COVID-19 pandemic.

 What do the changes mean?

It means that if you continue to be financially impacted by COVID-19 and cannot afford to return to full repayments, you should talk to your lender or creditor as soon as possible to discuss your options and ask them to consider providing further hardship assistance.  This may include reducing your repayments for a period of time, switching to an interest only loan for a period of time, restructuring your debts or other options that are suitable for your situation.

If you cannot afford to pay anything, call us on 1800 007 007 straight away for advice.

When negotiating with your lender or creditor

  • Tell them how you have been affected by the pandemic.
  • Tell them if you are receiving the JobSeeker payment.
  • Ask them about what hardship assistance options they are offering.
  • If you have multiple forms of credit with the same lender or creditor, one option may be to restructure or consolidate them and/or switch to interest only repayments.
  • Consider how much time you will need the repayment arrangement to be in place, for example, 3 months, 6 months, 12 months.  Usually, the longer the arrangement the more information your lender or creditor may need from you.
  • Only agree to repayments you can afford. You can always make higher repayments if your circumstances improve while you are still in a repayment arrangement.
  • Agree the timing of the repayments, for example, if you are paid fortnightly then you could schedule your repayments to be fortnightly as well.
  • Negotiate the highest repayments you can afford on your highest priority debts (home loan and utilities or possibly a car loan), so that you don’t fall too far behind.
  • Ask about any discounts, government rebates or other assistance you may be eligible for, such as state-based utility vouchers (electricity, gas and water).
  • Defer or make lower payments on low priority debts (for example, credit cards) if you are in financial hardship and you need to pay higher priority debts.

What to ask for when you negotiate a repayment arrangement

Try to negotiate the following as part of any agreed repayment arrangement:

  • Affordable repayments
  • Late fees and default/legal fees not to be charged
  • To deal with any arrears by extending the term of the loan (people usually do not exit financial hardship with money for higher repayments)
  • A reduction in the interest rate or a stop in interest charges for a length of time (this is more likely to work for credit cards)
  • Ask that your credit report is not affected and no default is listed while you keep to any agreed repayment arrangement
  • Do discuss that any repayment arrangement may need to be reviewed and extended as it is unknown when you can return to making the normal repayments (for example, because you are unemployed)
  • Ask for confirmation of any agreement in writing, particularly if it is for three months or longer.

If your lender or creditor will not agree to a repayment arrangement

If your creditor or lender will not agree, you can have that decision reviewed in the Australian Financial Complaints Authority (for financial disputes). This is a free and independent dispute resolution service. You can contact AFCA on their significant event hotline 1800 337 444 or on 1800 931 678.

If your creditor will not agree, you can also call us for advice on 1800 007 007

Speak to one of our financial counsellors

If your problem still hasn’t been solved, or you’re feeling overwhelmed, call us on 1800 007 007 to speak with one of our financial counsellors.