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Financial hardship

Find answers to frequently asked questions around financial hardship.

  • Financial hardship

  • Managing credit card debt

  • Financial hardship FAQs

    Options to help you

    Just as we've done over the past 50 years, we will continue to be there for teachers, their families, and those involved in the education community. 

    We’re offering a range of options to help you, such as our Financial Hardship program.

    Our Financial Hardship program will give you the time to prepare a plan to get back on track.

    Get in touch

    Every Member's situation is unique, that’s why we encourage you to talk to us so we can work together towards a solution to repay your home loan.

    Call us on 13 12 21, press 3 then option 4 or email us [email protected].

    Frequently Asked Questions

    1. What happens in a Financial Hardship program?

    The Financial Hardship program was created to help our Members through tough times. If you apply and are approved for financial hardship, you’ll have three to six months to prepare a plan to get on top of your finances. That means within this financial hardship period, you do not have to make your contractual repayments on your home loan.

    This gives you the time and peace of mind to focus on your situation. You can apply for our Financial Hardship program if you’re unable to make any repayments on your home loan.

    2. What can a Financial Hardship program help with?

    There are many reasons you may need assistance with getting back on track financially. These include, but are not limited to:

    • Unemployment
    • Illness or injury to you or a loved one
    • The loss of a loved one
    • Domestic violence
    • Natural disaster 
    • Global pandemics

    If affected by one of the above, you may be eligible for our Financial Hardship program. Please get in touch with us so we can support you through your period of financially difficulty.

    Get in touch

    3. Will financial hardship affect my credit score?

    If you’re approved for the Financial Hardship program, we will report that a financial hardship arrangement is in place, and during the financial hardship arrangement, your repayment history on your credit report will show whether or not you met the requirements of the financial hardship arrangement (instead of your usual payment obligations).

    Your credit report will not include the reason for the hardship arrangement, nor the details of the arrangement. 

    The recording of the hardship arrangement on your credit report will not be used in the calculation of your credit score. Your credit score can be found on your credit report.

    Visit the Comprehensive Credit Reporting page for more information on how we report to credit reporting bodies and understanding your credit score.

    If you’d like more information about financial hardship reporting, credit scores and credit reports, visit the CreditSmart® website.

    4. What happens at the end of the financial hardship period?

    The Financial Hardship program is here to support Members through a tough period.

    There are a number of options available to you during, or at the end of the financial hardship period, which include:

    1. Recommence principal & interest loan repayments - your repayments will increase within your agreed loan term to make up for any missed payments during your financial hardship period. 
    2. Request reduced principal & interest loan repayments and extend the term of your loan. If you have demonstrated that you can make repayments on your home loan on a principal and interest basis, we can discuss this option with you.
    3. Request Interest only repayments. If you’re unable to recommence making your contractual repayments, but are at a minimum able to make interest only repayments for a limited period, we can discuss this option with you. Subject to Bank approval and loan qualifying conditions based on your individual circumstances.

    If you determine that your financial position is unlikely to improve, you may be better off selling your property, or living somewhere else and renting out your property until you can afford the repayments again.

    Selling your property is a big step, so we recommend that you seek financial counselling or independent legal advice about this.

    You can contact a financial counsellor or the National Debt Helpline on 1800 007 007 to discuss your current financial situation.

    5. How do interest only repayments work?

    With interest only repayments, you only pay the interest charged on the amount you have borrowed on your home loan. This means your repayments are only servicing the interest component of your loan and you will not pay down the principal balance of your loan during the interest only period. The result is you may pay more interest over the life of the loan unless you make up the principal repayments you missed.

    Example

    If you have a home loan of $370,000 with a remaining term 25 years at a variable interest rate of 3.10% p.a, and you decide to make interest only repayments for one year, the total interest payable over the life of the home loan would be $166,478. If you remained on principal and interest repayments the total interest payable over the life of the home loan would be $162,166. By choosing to make interest only payments for one year the total extra interest cost is $4,312.

    6. What if I can’t make any repayments?

    It’s stressful not being able to make repayments, but it’s important to take a step back. You want to get through this period of uncertainty in the best financial position possible, not with even more debt.

    If during or at the end of your financial hardship period, you conclude that you can’t make your loan repayments, it may be your best financial option to consider selling your property sooner rather than later. While this is a big decision, the proceeds of the sale can repay the loan in full, leaving you free of debt from this loan. Selling your property is a big step, so we recommend that you seek financial counselling or independent legal advice about this.

    You can contact a financial counsellor or the National Debt Helpline on 1800 007 007 to discuss your current financial situation.

    Example 1

    If you have a home loan balance of $470,000 and you sold your property for $600,000, then $470,000 of the sale proceeds would be used to pay out the remaining balance and clear your loan to the Bank.

    Example 2

    If the home loan balance is $470,000 and you sold the property for $450,000, this amount would be used to reduce the outstanding home loan balance to $20,000. As there would still be $20,000 owing after the sale proceeds, you and the Bank would need to come to an arrangement to repay the remaining $20,000. The arrangement agreed upon will depend on your own individual circumstances.

    In the event that the sale does not pay off your home loan in full, we may be able to negotiate a settlement on the outstanding amount. We can guide you through this time and may be able to assist with specifics such as relocation costs, moving expenses, bond or rental.

    7. Selling your property to pay off your home loan

    If your financial position is unlikely to improve, you may be better off selling your property, or living somewhere else and renting out your property until you can afford the repayments again.

    This is a tough decision to make. But it's better to sell your property yourself rather than have us take possession and sell it for you. You'll avoid paying any legal costs passed on by us. 

    If you take no action and get to the end of your financial hardship period, without being able to make any repayments or taking the necessary steps to sell your property, you will leave us with no alternative other than to sell your property for you.

    This is an extreme last step and requires us to take legal action at your expense. It’s also more than likely that both defaults and judgement would be recorded on your credit file.

    We want to help you explore your options and make the best possible financial decision. 

    Selling your property is a big step, so we recommend that you seek financial counselling or independent legal advice about this.

    You can contact a financial counsellor or the National Debt Helpline on 1800 007 007 to discuss your current financial situation.

    8. What is Lenders Mortgage Insurance?

    Lenders Mortgage Insurance gives Members the opportunity to purchase a property without a 20% deposit. It makes it possible for us to support your purchase, while protecting us from a loss if your property has to be sold and is sold for less than the amount owing on the home loan.

    9. Who does Lenders Mortgage Insurance protect?

    Lenders Mortgage Insurance protects us from a loss. If there is an amount outstanding after the sale of the property, we may make a claim under the Lenders Mortgage Insurance. Helia Financial Mortgage Insurance Pty Limited (Helia) is the provider or underwriter of Lenders Mortgage Insurance. If Helia pays our claim, Helia may choose to recover the amount of the claim and any other costs, directly from you.

    It is important to note that Lenders Mortgage Insurance does not protect you or any guarantor. It should not be confused with Mortgage Protection Insurance which is a separate insurance policy that protects you if you are unable to make repayments on your loan. Therefore, Lenders Mortgage Insurance does not stop you from being liable for any shortfall that may arise if the sale of your property does not fully repay your debt to us.

    10. What are my options to sell if there is Lenders Mortgage Insurance on my home loan?

    If you’re experiencing difficulties meeting your home loan repayments, one of the hardest decisions you’ll have to make is to sell your property.

    If your home loan has Lenders Mortgage Insurance, Helia’s team of Loss Mitigation consultants’ include qualified real estate agents who will work with you and us on any borrower shortfall sale scenario providing guidance and recommendations on:

    • Timeframe to sell
    • Real estate marketing campaigns
    • List price and sale offers
    • Costs that Helia may cover such as moving costs
    • A portion of debt release of the shortfall claim amount

    With the support of Helia’s property experts, the team can help you sell your property to allow you to exit the property in a dignified and most cost-effective manner.

    More information is available on Helia’s website.

    11. Where can I get additional help if I need it?

    The effects of financial difficulty can really take its toll. If you’re struggling with your mental health, please get in touch with one of the organisations below. One conversation can make a big difference.

    The Australian Department of Health offers a range of online mental health support services. Please visit their website for more information.

    For personal crisis and mental health support services contact:

    If you are experiencing domestic violence, please contact:

    12. How to contact us

    Every Member is unique, and so are their financial difficulties. We want to do whatever we can to help you through this time. Please get in contact with us on 13 12 21, press 3 then option 4 or email us at [email protected].

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