The last few years have been a stark reminder that nothing is certain in life. Covid-19 has thrown businesses, homes and incomes into disarray for many of us and the financial strain is real.
Make no mistake however – missing loan repayments when due is a breach of your loan and mortgage conditions. Do not sit quietly and let this happen. Advise your lender as soon as possible and discuss the options. The bank websites have 0800 numbers for you to contact them.
There are various options to assist a short-term glitch, such as:
- Restructuring your loan. Lengthening your loan term can reduce minimum repayment requirements considerably.
- Requesting a move to interest only payments for a period. Payments are reduced as no principal is being paid back. The loan principal remains static for a short period while you get back on your feet.
- Fixing your interest rate can provide longer term stability. You know what you will owe for the length of the fixed term.
- A loan ‘holiday’ could be an option but remember, the interest is still accruing and will be added to the principal. Counterproductive to loan reduction, but in a real short-term crisis it is an option.
Non-payment of your loan is a breach of your lending and mortgage obligations. Banks do not like surprises so speak up quickly for the best outcome.
By Jenny Cull
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter.
