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Banks extend loan repayment deferral for Australians in crisis

Banks will extend loan deferrals for financially devastated Australians for up to four months as they enter a “new phase of support”.

Many Australians were entered into a six-month deferral automatically by their bank when the COVID-19 crisis escalated in March and April.

Australian Banking Association CEO Anna Bligh told Jim Wilson the next phase will work differently “to suit the needs of every customer”.

“As we move towards economic recovery, we will need a much more tailored approach.”

Banks have already begun to “check-up” with their customers, she said.

“More than 55 per cent of customers [are] expecting to experience further difficulties.

“Banks will offer them a suite of options.”

While interest has continued to accrue during the deferral period, Ms Bligh said there will be no immediate repayment pressure.

“There’ll be no balloon payment as the end of the six months, but there will be a requirement that customers do ultimately repay the whole loan and the interest that was due.

“It will be up to customers to decide the best way to do that.”

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Image: Getty