If you are having trouble meeting the repayments on your loan you should
contact us as soon as possible to discuss your situation. Make sure you are
honest. Remember, the sooner you act the easier it will be for us to assist.
If you are unsure about whether you can afford to pay or not, contact a
financial counsellor for help (see www.fido.gov.au).
You can ask for a hardship variation
If your loan is covered by the National Credit Code, you have the right
to ask us to enter into a hardship variation to:
- extend your loan to reduce your
- postpone your repayments for a period
Note: A hardship variation gives you temporary relief. You still need to
pay off your entire loan, but it will be stretched over a longer time period
(and you will pay more interest in the long run).
A financial counsellor, community legal centre or solicitor may be able
to help you ask for a hardship variation (see www.fido.gov.au).
You do not have to agree to a hardship variation if it is not on the
terms you requested.
We do not have to agree to your request to change the terms of your
If we do not agree
If we refuse your request to change your contract because of hardship, you
can dispute our decision.
We are a member of an external dispute resolution scheme approved by
ASIC, the Credit Ombudsman Service Ltd (COSL),
which may be able to hear your complaint. Please refer to our Complaints and
Dispute Resolution Guide for further information.
You can also apply to a tribunal or court in your state for an order to
change the terms of your loan.
Talk to other creditors
You should also talk to all of your other creditors about your situation.
Again, the sooner you take action and discuss your financial problems with your
creditors, the easier it will be to try and work out a solution. If the credit
is covered by the National Credit Code, you can request a hardship variation
for those products also.
Here are some other options that may be that you may wish to consider if
you are experiencing financial hardship.
- Budget - Take
some time to think about your income and expenses, and see if you can
reduce your expenditure. You can use FIDO’s budget planner to help you
prepare a budget and manage your income. There is also lots of information
and tips on budgeting and dealing with debts at www.fido.gov.au
- Negotiate a better interest rate - See if you can negotiate a better interest rate with your lenders.
- Refinance - You
might consider switching to another type of loan product or changing to a
different lender because they have a cheaper loan. Although refinancing
might look like a good idea, weigh your options up carefully before making
a decision. If you are already in default or under financial stress, be
realistic about whether you can afford repayments under a new refinancing
arrangement. You may have to pay large fees to get out of your existing
loan and pay mortgage insurance again. Go to www.fido.gov.au for more tips
and a checklist on what to look out for when switching loans.
- Seek government assistance - Find out if you are entitled to benefits or other government assistance.
Visit the Centrelink website to see if you are eligible for any
entitlements. The site includes specific information for unemployed,
self-employed, people in crisis (e.g. recently separated, divorced or
bereaved, ill or injured). Some state governments offer short- term
interest-free mortgage relief loans to cover temporary shortfalls. Contact
your local state Department of Housing.
- Ask for help - Financial
counsellors can help people who are in financial difficulties. They
provide a free, independent and confidential service to help you work out
the best options for your situation. ASIC also has information about
credit and other financial issues. A full list of financial counsellors is
at www.fido.gov.au. ASIC Infoline: 1300 300 630
- Sell your property - You could downsize or consider renting for a while. If you are
really struggling to meet the repayments on your loan and you do not see
your financial position considerably improving, it may be better to sell
your property now then leave it till later when you have incurred more
fees or perhaps gone through an expensive refinance. Also, if you leave
things too late (which can happen very quickly) you will lose your ability
to sell the property on your terms.
- Access your superannuation early - Hardship provisions allow for early withdrawal of superannuation
by people who are experiencing severe financial difficulty. This is a last
resort option and you should think about it carefully. You may risk losing
your house and your superannuation. Get the advice of a financial
counsellor to help you decide what is best for you.