Australia's top banking body extends loan repayment deferral period for four months

Australia's top banking body on July 8 announced that banks in the country will extend the loan repayment deferral period from six months to ten months. The Australian Banking Association (ABA) on Wednesday said that Australia’s banks will implement a new phase of support to assist customers to get back to making their repayments, however, it also added that those who are able to repay their loans should resume doing so, which would allow support to be directed to those who need it. 

Read: Australia To Shut State Border As Melbourne Cases Surge

"A deferral extension of up to four months will not be automatic, it will be provided to those who genuinely need some extra time.  Many customers may need less than four months to either restructure their loans or get back into full repayments. Banks will work with customers to find the best options to restructure or vary their loan," ABA said in a media release on July 8. The ABA in March had announced a six months loan repayment deferral period, which has now been extended to up to four months for those who need it. 

Read: Australia's Broadcasters Call For 'urgent Reform' Amid Losses Due To Streaming Services

"This next phase of bank support will avoid a 'cliff' for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially. Australia’s banks supported their customers as the country entered the COVID-19 crisis and they are determined to support their customers on the way out of the crisis," ABA CEO, Anna Bligh said in a statement. 

Read: COVID-19: Australia's Victoria To Close Borders For 1st Time In 100 Yrs

Options for borrowers

Australian banks will approach customers who are reaching the end of their loan repayment deferral period and will ensure that they can start repayment whenever possible in the next four months. As per ABA, borrowers will get options that include, extending the length of the loan, converting to interest-only payments for a period of time, consolidating debt, or a combination of these and other measures. 

Read: Australian State Records Highest Daily Increase