COVID-19: Options for managing your personal loan & car loan
With many Aussies under financial pressure as a result of the COVID-19 crisis, many are struggling with their repayments in a number of different ways. If you have a personal loan or a car loan and your finances have been impacted by the pandemic, the Credit Savvy team have compiled some of the available options introduced by the big 4 banks that you may like to consider.
Talk to your lender about their financial support packages
If you’re struggling to pay off your personal loan repayments due to the crisis, you should contact your lender as soon as you can to request financial assistance.
Several car manufacturers, including Volkswagen, BMW, Ford, Nissan and Toyota are also offering relief measures to car owners. If you have a car loan and you have a finance arrangement through your car dealership, get in touch to inform them of your financial situation to see if they can help.
So far, lenders have introduced a number of options to personal loan and car loan customers to help them manage their repayments. These options may include:
- Reducing your repayments to the minimum amount (if you are currently making higher repayments)
- Depending on the type of loan, you may be able to redraw funds from your current loan based on the extra repayments you have made in the past. However, this could increase your interest charges over time.
- Deferring loan repayments or requesting repayment pauses. Note that this would mean fees and interest may continue to accrue during the deferral period.
It’s important to speak with your lender to understand the details for each option so you are able to consider the risks before you make your decision. If these options are not available to you or are not suitable given your circumstances, your lender may be able to offer other forms of hardship arrangements to help you manage your loan.
What if I’m not affected yet?
Regardless of the current economic situation, we should always try to find ways to protect ourselves and our finances. Here are some questions you may like to ask yourself to help you prepare for unexpected scenarios:
- Can my current lender offer me a better interest rate?
- Can I cut down my monthly car costs?
- Do I have an emergency fund in case my situation changes?
- Is my budget flexible enough to account for potential changes?
Want to stay in the loop to keep up with the latest news and updates related to COVID-19? You can visit our COVID-19 & your finances series to get tips and support information to help you manage your finances during this difficult time.
The information in this article is correct as at 7 May 2020. Credit Savvy endeavours to provide accurate information and no responsibility is taken for errors or oversights.