Australia’s major banks are stepping up to provide customers with much-needed relief amid unprecedented calls for financial assistance.
The Australian Banking Association (ABA) last month announced small businesses could receive six-month deferrals on payments up to $100 million.
And less than a week later, the major banks extended the same deal to home owners and slashed mortgage rates, too.
Here’s what each of the Big Four is offering.
Home loan customers can defer payments for up to six months under ANZ’s coronavirus assistance measures.
But interest will still be charged during the deferral, thereby increasing the overall amount of a customer’s loan.
The bank says home owners should consider alternatives, including recruiting funds from an offset account, repayment reductions and redrawing extra repayments, before applying for a mortgage holiday.
Personal loan customers can also reduce repayments to the minimum repayment amount, or access extra repayments made previously if their loan comes with a redraw facility.
As for ANZ credit card customers, those facing financial hardship can transfer to a card with lower interest rates, decrease credit limits, or establish direct payments.
Small and medium-sized enterprises (SMEs) can pause loan repayments for six months, with interest capitalised at the end of the deferral.
Overdraft increases are also available for the next 12 months.
And the Morrison government is backing loans to struggling businesses under its Coronavirus SME Guarantee Scheme.
The policy allows affected businesses with a maximum turnover of $50 million to obtain an unsecured, three-year loan of up to $250,000 – half of which is guaranteed by the government.
Home loan customers facing financial hardship can request a six-month deferral, during which time interest and fees will continue to accumulate.
CBA also offered all credit card holders behind on their repayments waived late payment fees and refunds on interest charged for the month of March.
The bank has introduced an automatic three-month loan deferral for SMEs that have borrowed up to $5 million, with a possible three-month extension.
This covers principal and interest repayments for April, May and June.
Businesses that have borrowed between $5 million and $10 million have access to a six-month loan deferral on principal and interest repayments from April, in line with the ABA’s announcement.
SMEs can also access the Coronavirus SME Guarantee Scheme, with interest deferred and capitalised at 4.5 per cent for the first six months.
Finally, CBA will waive fees for eligible business customers with an EFPTOS machine or eCommerce facilities from March until May, and slash interest rates on small business loans by one percentage point.
NAB is also offering a six-month mortgage holiday to home loan customers.
But only customers who can prove the coronavirus has placed undue pressure on their finances are eligible.
Meanwhile, variable personal loan borrowers can access their redraw facility if they are ahead on repayments, and reduce minimum repayments to $100 per month from April 17.
And credit card customers can drop monthly repayments to $5 or 0.5 per cent of their closing balance – although NAB warned customers that interest on the outstanding balance would be calculated on a daily basis.
Late payment fees have also been wiped for all cardholders for the next three months, starting from April.
SMEs can defer repayments for six months and apply for new $250,000 loans under the government’s coronavirus loan guarantee scheme.
Eligible businesses can also obtain deferrals on business credit card repayments and reduce their monthly repayments.
And NAB won’t charge late payment fees on these cards for at least the next three months.
Meanwhile, EFTPOS rental fees were automatically waived for eligible customers for three months through to June 30.
Home loan customers who are unemployed or facing reduced income can apply for a three-month repayment deferral, with potential for a three-month extension after review.
Westpac is also offering term deposits with 1.7 per cent interest (2 per cent for Australians aged 65 and over) over the next 12 months to provide higher returns for customers with savings up to $500,000.
Eligible Westpac business customers can defer their loan repayments for six months in accordance with the ABA’s announcement.
The bank has also slashed interest rates on overdrafts and both new and existing small business cash-based loans by two and one percentage points respectively.
And there are also credit card repayment deferral options, and automatic EFTPOS rental fee refunds for three months.