A 2019 report released by the Australian Financial Security Authority showed that one of every 5 Australians experience financial hardship as a daily reality.
In all probability, the statistics has changed for the worse, after the COVID-19 outbreak that immediately followed the 2019-2020 catastrophic bushfire. The resulting loss of business income or of regular employment is again, driving many Australians to seek relief from their monthly loan payments by way of loan modification; or other means by which they could temporarily pause or reduce monthly loan payments.
Financial hardship is a circumstance not uncommon to many Australians, even if the country ranks among the world’s wealthiest nations. It’s just that many Australian communities are often exposed to natural disasters that often occur one after another. Such events have great impact on vulnerable citizens, since the damages wrought by the natural hazards adversely affect their ability to recover quickly from financial difficulties.
Financial Hardship and Australia’s Consumer Credit Protection Law
In recognizing the frequency of the economic hardship that many Australians go through during challenging times, the country’s National Consumer Credit Protection Act of 2009, gives citizens the right to request modifications of their credit or loan obligations on the ground of financial hardship — not only as a result of a hazardous event/s but also due to illness, loss of employment or even family breakdown.
Lending institutions on the other hand, are under obligation to consider such requests; but given the right to base their approval on their own set of standards. Now here’s the thing, not all Australians have levels of financial literacy that enable them to obtain the best loan modification deal that can provide them the financial relief they seek. In fact, not many are unaware that there are licensed finance brokers who can negotiate a hardship variation arrangement on their behalf.
The team of financial experts of National Loans Australia (NLA), for one, offers their financial services by representing clients seeking to apply not only for hardship variations, but also for refinance deals, as not all borrowers are eligible for hardship modifications.
Keep in mind however, that unscrupulous individuals are most active during times of financial hardship. That is why before engaging a finance broker, it would be best to be on the safe side, by engaging the services of a licensed finance broker.
Ways by Which Finance Brokers at National Loans Australia Can Help
As finance brokers, the financial services offered by NLA start by providing clients and would-be clients, with a free to use, online Loan Pre-Approval tool. The purpose of which, is to find out the financing options available to an individual based on a bank’s or other financial institution’s assessment of the applicant’s personal information, economic condition and credit history.
As licensed brokers, the goal of every NLA broker is to help a client obtain a finance deal that is most beneficial, and at the same time, suitable to their present and future capabilities to settle a financial obligation. While some clients are not eligible for a hardship variation that will reduce their monthly payments, the NLA team can help by negotiating for a refinance deal.
In their 24 years of experience, this group of financial brokers have maintained well-founded relationships with many Australian lenders, including the non-traditional fintechs. While a hardship loan-modification can be negotiated only with the original lender, a refinance deal is different. A loan refinance can be negotiated with another lender who will agree to provide funds to pay off an existing loan with the original lender.
That being the case, the funds provided will then be the refinance loan that a client will settle with the new lender; but under better and more manageable repayment terms. A refinance loan actually takes away the past due interests and penalty charges that tend to make an outstanding loan more difficult to pay.