As we all go through these unprecedented times, I wanted to reach out and give you some tips on how to better manage your personal financial situation.
We are all going through this together and we want to help in any way possible.
I must say, it is certainly uplifting to see how governments, the banks, business and the community are all coming together to help each other.
1. Financial hardship assistance from your lender
All lenders are providing assistance, including the ability to defer loan repayments for up to 3 to 6 months, depending on your circumstances.
While normally this may appear on your credit record, it is likely that any “Covid 19” related credit entry will in future be ignored by any lender because it is such an economy wide event.
In fact, we have already had word from a number of lenders and credit reporting agencies that being proactive with your lender about financial hardship won’t negatively affect your credit rating.
It is better to act early and preserve your cash flow if you have been affected.
The home loan financial hardship contact lines and links to their relevant websites for a range of lenders are available
by clicking this link – https://www.smartline.com.au/covid-19/
Additionally, below are the asset (car & equipment etc) finance and personal loan financial hardship contact lines and links to their relevant websites for a range of lenders also.
ANZ 13 23 73
Macquarie 1300 368 908 or this link
Westpac 1800 067 497 (press option 2) or 1300 650 110
Metro Finance 1300 362 627
Capital Finance 1800 642 626 or businessassistCFAL@westpac.com.au
BOQ 1800 079 866 or this link
Pepper Asset Finance 1800 356 383 or firstname.lastname@example.org or this link
Now Finance 1300 275 669
Liberty Financial 13 11 33 or email@example.com
WISR Personal Loans 1300 992 007
Firstmac 13 12 20 or firstname.lastname@example.org
RACV 13 72 28
** Please note that the wait times are long on the phone so lodging a request via the website if possible is often recommended as the preferred method.
2. Government assistance
The Federal Government has announced a significant assistance package for households and businesses which includes $20k to $100k cash flow boost for small business, the ability to access up to $10k of super and an increase in income support payments.
Here is a link to the details of the government support for individuals and households.
I suggest that if you have been affected, read up on what you may be eligible for, and to take advantage of these to help you through.
3. Interest rates
With regard to home loans, the RBA cut interest rates again on Thursday and, more importantly, provided the financial system with significant additional liquidity including low cost 3 year fixed rate debt.
This has meant that there are now numerous lenders offering 2 and 3 year fixed rates between 2.19%pa and 2.39%pa.
Given that these fixed rates are well below current variable rates, and it appears the RBA is not going to cut the cash rate any further (it then effectively goes negative which they said they want to avoid), this means that if it suits your personal circumstances it may be worth considering fixing some of your loan at these low fixed rates.
Remember that fixed rates do come with restrictions (limited extra repayments and usually no redraw/offset) plus there can be break costs if you break it before the end of the fixed rate period, but it is food for thought to save interest. Please email me if this is something you want to consider.
Please note that lenders have only just moved their variable rates down 0.25%pa (with some still to move) from the previous rate cut a few weeks ago.
Some lenders are still to make the move in the next few days (including HSBC, CBA, CUA, Citi and ME) so by the end of this week you will have seen your variable rate updated, if it hasn’t happened already.
Most lenders are yet to announce what they are doing in response to the RBA rate cut on Thursday but it appears most lenders won’t be dropping their variable rates further, and if they do it will be a maximum drop of 0.15%pa.
I hope all this information helps and please let me know if you have any questions. I apologise in advance if my response is not as fast as normal.
Wishing you and your family good health.
Take care, stay calm and keep healthy!