Of the more than 900,000 loans which have been deferred since the start of the COVID-19 pandemic, around 450,000 customers are approaching the end of their six-month repayment pause in September or October and will soon need to decide on their next steps.
There are 65,000 loans to small and medium businesses which will need to be assessed by the end of September, with 40,000 more requiring attention by the end of October.
For mortgages, 260,000 are due to be assessed in the next two months, with 80,000 accounts' pauses expiring by the end of September and 180,000 more by the end of October.
Banks have been actively preparing for the oncoming wave of customers needing personalised assistance all at once.
“The loan deferral measure offered to customers by Australia’s banks has led to the largest ever customer contact process in the industry’s history, with an additional 5,000 new or redeployed staff working to ensure customers understand their options,” said ABA CEO Anna Bligh.
As summarised by Bligh, customers will be presented with several possible next steps during the assessment calls, including:
- Resuming repayments at the end of the deferral period, if it can be afforded
- Restructuring or varying the loan, including converting to interest only payments for a period of time or extending the term of the loan
- A further four-month deferral in certain circumstances
- “Tailored assistance” that addresses the needs of customers unable to pay their loan over the longer term
“Customers know what’s best for them. It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision to suit their needs,” said Bligh.
“As customers who are able to begin their repayments again, it allows banks to focus their support on those who really need it.”
Of the 900,000 loans which have had payments deferred altogether, 13% had already resumed repayments by the end of July.