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COVID-19 Lending Guide

COVID-19 Lending Guide

During this difficult and unprecedented time, you may be faced with some financial uncertainty. As such, we wanted to reach out to provide some resources and support regarding your finances which may help if you have been adversely affected by Covid-19. We have also provided some options for those clients who have not been impacted by Coronavirus, but still want to reduce their monthly costs.

As you may be aware, the majority of lenders have provided relief packages in conjunction with the Federal Government. More guidance on the stimulus packages can be found here. Contacting us or your lender directly should be your first step if you’re struggling to make your repayments due to unforeseen circumstances.

Personal Home Loan Customers

Currently, lenders are offering a deferral of home loan repayments for up to six months (with interest capitalised), as well as reduced fixed rates for owner occupiers paying principal & interest repayments, with some as low as 2.19%.

Note that if your income has been affected by Covid-19, consider using the loan repayment deferment as your last choice if possible. If you choose this option, the loan repayments are not required to be paid for up to 6 months, however the interest will be capitalised to your loan. This means that after the 6-month period, you will owe more than the loan balance you started at before you deferred. It is also worth noting that the Covid-19 assistance is not automatic, and your lender will ask a few questions to understand your situation and assess your eligibility.

Example: If you have a $400,000 loan at an interest rate of 3%, and choose to defer, after the 6-month deferment period, you will owe $406,000. The banks have agreed to extend the deferred loans for a further 6 months, however before choosing to defer you may want to consider some other options:

  1. Access your redraw and/or offset funds to assist with loan repayments.
  2. If paying more than minimum repayment amount, reduce your repayments to the minimum required
  3. Change your repayments to Interest only. Remember – if you choose this option, your repayments may be higher when the loan is converted back to principal & interest repayments as the overall loan term has reduced.
  4. Seek a pricing discount from your existing lender to reduce repayments.
Business Loan Customers
For those in business, lenders are offering the following:
  • A deferral of business loan repayments, including equipment/vehicle finance, for up to six months with interest capitalised for business loans now up to $10 million.
  • Reduced rates on Overdraft facilities and some business loans
  • Merchant terminal rental fee waivers
  • Deferred payments for business credit cards for up to three months
  • Fee-free redraws for those business loans with redraw available
  • Unsecured $250,000.00 business loan 50% guaranteed by the Federal Government
As per the personal home loan section above, please consider other options in lieu of the loan repayment deferment if they are available to your business.
$250,000.00 Unsecured Business loan – What is available?
Three year, unsecured Business Loans of up to $250,000 for working capital purposes only (not asset purchases or refinancing of existing debt).
  • For the first six months, all repayments are deferred.
  • For the remaining term of the loan, amortising principal and interest repayments will be applicable.
  • No establishment or account fees.
This offer is for new loan applications only and cannot be applied to existing loans, including top-ups or variations. Customers may only access one loan under this offering.
Who is eligible?
Small to medium sized businesses and community groups with annual turnovers less than $50 million can apply for loans under this offering. The offer is limited to one loan per customer. Not-for-profit organisations with turnover less than $50 million are also eligible. Both current business customers and new-to-bank customers are eligible.
Summary
Unfortunately, lenders will generally require you deal with them directly for any COVID-19 assistance as the client is required to acknowledge any changes to their loans regarding deferment of repayments. However, we are here to help if we can or direct you to the right bank resource. As a client, we can assist you directly with:
  • Performing a health check on your loans and submitting a pricing request to reduce rates with your existing lenders if required;
  • Re-financing your loans, should your existing lender not want to meet market rates. For those in a position to re-finance, there are some very low rates on offer for fixed and variable rate options, plus some lenders offering up to $4,000 to refinance; and/or
  • Restructuring and consolidating your loans, should this be beneficial.
To assist you with contacting your lender, we have provided a list below of links to some helpful resources.
 Commonwealth Bank
Macquarie
National Australia Bank
Westpac
Bank of Melbourne
Suncorp Bank
ING
Bankwest
ME Bank
Judo Bank
AFG Home Loans – Alpha
AFG Home Loans – Edge
AFG Home Loans -Options
AFG Home Loans – Retro/Link
AMP
Adelaide Bank
Auswide
Bank Australia
Bank of China
BOQ
Beyond Bank
Bluestone
Citi
CUA
Heritage
Keystart
La Trobe
Liberty
Pepper
P&N
Resimac
St George
Virgin
Paul Moran

written by:

Paul has over 25 years of experience in finding financial solutions for homebuyers, investors and business owners.
A licensed broker and member of the Mortgage & Finance Association of Australia (MFAA), Paul’s extensive experience includes 20 years with a major bank, seven of which were as commercial banking manager.
Paul delivers a holistic financial solutions to achieve the best possible outcome for a client’s personal or commercial lending needs. Paul also provides a comprehensive financial consultancy to business owners on commercial, equipment and invoice finance.

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