Banks have started reaching out to their clients whose six-month deferral periods are ending, according to the Australian Banking Association (ABA).
At least 450,000 loan deferral customers will be assessed in the coming weeks as they approach the deadline of their repayment holiday. This figure includes 105,000 business loan deferrals to small- and medium-sized businesses and 260,000 mortgages.
"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 Anna Bligh, CEO of ABA.
Bligh said banks should be able to help their clients with the next steps after the assessment. For borrowers who are still struggling, banks can provide several options, which can be either in a form of loan restructuring or an extension of the deferral period for up to four months.
"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," Bligh said.
Bligh urged customers who are already in good financial condition to resume their repayments the soonest possible time.
“As customers who are able to begin their repayments again, it allows banks to focus their support on those who really need it," she said.
Of the 900,000 loans that have had payments deferred, roughly 13% had already resumed repayments by the end of July. Some lenders have estimated that an additional 100,000 borrowers have begun resuming payments in the month of August.