New bank data shows Australian borrowers are resuming loan repayments
Financial stress from the coronavirus pandemic is easing if you take this “good sign for the economy” into account.
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The amount of borrowers placing loans on hold due to financial stress from the coronavirus pandemic is falling, fuelling hope that pressures from the recession are easing.
New figures from the Australian Banking Association show the total number of loans on hold has nearly halved, with both businesses and households deciding to resume repayments.
The banking sector allowed borrowers facing distress due to the health crisis to place loans on hold for up to six months.
Loan deferrals peaked in June, with more than 700,000 mortgages and small business customers freezing repayments.
According to the ABA, the total number of deferrals has fallen by 45 per cent, with nearly 440,000 home and business loans still paused.
ABA chief executive Anna Bligh said it was a positive sign economic conditions were improving and people felt able to get back on their feet following the downturn.
“These loan deferrals have helped hundreds of thousands of Australian families and small businesses survive the pandemic,” Ms Bligh said.
“This is a good sign for the economy. It shows that more Australians are getting back on their feet and resuming their loan repayments.”
About 270,000 mortgages remain on hold, while 116,000 small business still have repayments paused.
The sector’s blanketing six-month deferral period has ended, with banks now providing individualised support to assist customers who are still impacted by the recession.
Australia’s major banks have hired thousands of additional staff to assist with the larger volume of assistance claims that have occurred during the lockdown.
Tailor-made support measures for banking customers still affected by COVID-19 may include loan restructuring or further deferrals.
Ms Bligh said people still facing financial difficulty should contact their bank as soon as possible to discuss ongoing help.
“If you are in financial difficulty, please call your bank, they can help you find a way through,” she said.
“The earlier you speak to your bank, the more options they have to help you find a way through.”
Originally published as New bank data shows Australian borrowers are resuming loan repayments