With the increasing number of COVID-19 cases worldwide, you no longer have to worry about it completely affecting your budget. Banks and lenders across Australia have announced their support for both residents and small businesses.
Assistance is now accessible for borrowers as the coronavirus outbreak continues to impact Australia’s financial system. But this didn’t crash the nation’s economy but rather displayed its firmness and resilience.
For business owners
The number of small businesses who are experiencing various levels of distress are growing rapidly. Many are facing problems when it comes to paying rent because their revenues are dropping due to the virus outbreak.
This is why the banks are offering relief to small businesses. This will apply to about $100 billion worth of small business loans. By simply registering with their banks, business owners can have access to a six-month pause from making loan repayments.
Starting on 03 April, business loan rates were cut down by 100 bps along with the initial 25 bps reduction that was declared on 03 March.
For home loan customers
This relief measure offers the choice to postpone loan repayments by up to six months. On May 1, some banks offer to reduce one to three-year arranged owner-occupied principal and interest by 2.29% or 70 bps. This applies to both new and existing customers.
On the same date, repayments for every variable P&I home loan accounts will also be automatically cut down. But the minimum will still be based on the borrower’s loan contract. Borrowers can choose to withdraw if they want to keep their current principal repayment levels.
Business owners need to apply for the deferrals. Still, the banks will carry out quick approval processes so they can offer support as soon as possible. Despite the impact of the current pandemic, they are given the opportunity to concentrate on more important things rather than worry about their repayments. This will allow many businesses to remain operational and keep employing Australian staff.
If businesses are capable of repaying, banks are still willing to lend them more money. However, interest may continue to grow in the course of this payment holiday. This means the amount of your repayments will accumulate by the end of the period.
Nevertheless, this initiative made by the banks can boost the certainty of businesses who are employing over 5 million professionals in Australia and going through this challenging time.
For many Australian borrowers–both home and business owners–thinking about their personal financial security can be tough. That is why major banks are giving them some time off from paying their loans.