Bushfire season has already begun in Australia, with a predicted hot and dry summer bringing heightened risks.
As brokers you may have clients who will be affected by bushfires and other natural disasters.
Lenders do offer hardship assistance to borrowers impacted by an event like a bushfire or other severe weather event.
Lenders may announce specific support for certain events, but your clients can always contact their lender to explain their circumstances.
If your clients are impacted by a natural disaster and are concerned about their ability to make repayments, we recommend you direct them to their lender, as soon as is practical, to see what support can be taken up and, if necessary, put a financial hardship arrangement in place.
A financial hardship arrangement can not only give your clients some immediate relief while they focus on recovery but can protect their credit scores as it means they will not have repeated missed payments on their credit report.
“In the midst of a crisis, your clients’ priority may not be to contact their lenders to seek out relief. Encouraging your clients who are not able to make repayments in the event of a natural disaster to contact their lenders is a good step to take. It is never too late to seek help on hardship, but it is important to do so early on,” said Anja Pannek, MFAA CEO.
“Some borrowers may be concerned that a financial hardship arrangement may prevent them from securing a loan in the future. In fact, doing so may protect their record as a good, reliable borrower. Knowing this can make your clients feel more confident in contacting their lender as well.”
Lenders have contact details on their websites as does the Australian Banking Association which also has contact details and information for banking customers in the event of a natural disaster.
Webinar recording: What to do when your client says they are in hardship
Clients can find themselves in hardship for many reasons, including the impacts of natural disasters, and may come to you for help.
This webinar, recorded on 1 September 2023, includes:
MFAA members can view the recording and access a financial hardship checklist in the MFAA Learning Hub.
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