How to Talk to Your Lender About Hardship

If you're struggling with repayments, your lender is legally required to help. Under ASIC's Regulatory Guide 96, all Australian lenders must have a financial hardship program and must genuinely consider your application. Here's exactly what to do.

Your Rights

Under the National Credit Code, you have the right to apply for a hardship variation if you're unable to meet your repayment obligations. Your lender must respond to your application within 21 days and provide a written notice of their decision within 28 days. They cannot refuse to consider your application, and they cannot charge you for making one.

Step 1: Call Your Lender's Hardship Team

Don't call the general customer service line — ask to be transferred to the "hardship team" or "financial assistance team" specifically. These teams are trained to help and have authority to offer solutions that general staff don't. Most major banks have dedicated hardship numbers:

• CBA: 1300 720 814
• Westpac: 1800 067 497
• ANZ: 1800 149 549
• NAB: 1800 701 599

Step 2: Explain Your Situation

Be honest and specific. The hardship team needs to understand why you're struggling (job loss, reduced hours, illness, rate increases, cost of living) and whether it's temporary or ongoing. You don't need to have a solution in mind — that's their job.

Step 3: Options Your Lender May Offer

Depending on your situation, your lender may offer one or more of these arrangements:

• Temporary interest-only period: Switch from principal and interest to interest-only for 3-12 months, reducing repayments by 30-40%.
• Reduced repayments: A lower repayment amount for a fixed period, with the difference added to your loan.
• Payment pause (deferral): A short-term pause on repayments entirely — usually 1-3 months. Interest still accrues.
• Loan term extension: Extending from 25 to 30 years reduces monthly repayments but increases total interest paid.
• Rate review: Sometimes the simplest fix — many lenders will reduce your rate if you're on an uncompetitive product, especially if you mention refinancing.
• Fee waivers: Removal of monthly account fees, late payment fees, etc.

Step 4: Get It in Writing

Whatever arrangement you agree to, make sure you receive it in writing. This protects you if there's a dispute later. Keep a record of who you spoke to, when, and what was agreed.

If Your Lender Says No

If your lender refuses your hardship application or you disagree with the solution offered, you have options:

1. Ask for a formal written explanation of why your application was declined.
2. Lodge a complaint through the lender's internal dispute resolution (IDR) process.
3. If the IDR doesn't resolve it, escalate to the Australian Financial Complaints Authority (AFCA) on 1800 931 678 or at afca.org.au. AFCA's service is free.
4. Contact the National Debt Helpline (1800 007 007) — financial counsellors can advocate on your behalf and have experience dealing with lender hardship teams.