It's so far been a year full of (mostly unwelcome) surprises thanks to coronavirus and from the daily and sometimes hourly news updates, it appears there is more to play out. But most states have reopened businesses, the economy is in the post-COVID recovery and people are adapting their lives to the 'new' or the 'current' normal.
So we feel it’s a good time to update and inform you on a few issues around consumer loans. Most importantly how to revisit your plans to buy a new car, bike, boat or caravan that may have been on the back-burner for the past few months in the light of what has happened during the coronavirus pandemic.
Action Required: Loan Deferrals, Holidays and Waivers
During the start of the economic phase of the crisis, the major banks and many lenders stepped-up to support people with deferrals on their loan repayments. The specific details will depend on individual arrangements made between borrower and lender but the support most commonly offered was either a loan deferral or a repayment holiday. Very few, if any lenders offered a complete waiver of loan repayments.
The loan deferrals offered by the banks were mostly set for a period of 4 months and that deadline is approaching or may be upon you right now. If you approached your lender for a loan deferral or other support earlier in the year, now is the time to get in touch with the lender to discuss the next phase.
We have been advised by some banks that they are contacting their customers to discuss individual arrangements. Some lenders are extending their assistance to eligible customer for up to an additional 4 months. But we stress, this is on an individual basis, to be negotiated between borrower and lender and is in no way automatically offered or granted.
Action Required: Review Credit Report and Credit Score
Now may also be a good time to check your credit report and address any issues in your credit score in preparation for you bike, car, boat or caravan loan with Jade Finance.
- Your credit score is used by lenders to assess your suitability for a loan.
- Your credit report is your credit history and it contains details of each time you’ve applied for a loan and details of your payment history.
- What’s in your credit report determines your credit score, but they are separate items.
- You are entitled to one free copy of your credit report free each year, though you may have to wait around 10 days. You can request a copy through Equifax, illion or Experian. You should only have to pay a fee if you ask for a copy more than once in a year.
- You can request your credit score from a number of organisations including Credit Savvy, Credit Simple, Finder, GetCreditScore and WisrCredit.
- Once you have your credit score and credit report, it’s time to see if anything needs fixing. That is, if there are any mistakes, entries that you dispute or entries that are old enough to qualify for being removed.
- Worth noting at this point is that if your bank gave you loan repayment deferral support due to COVID-19, this should not have an impact on your credit rating, provided your repayments were on schedule prior. The banks announced this decision early on in the crisis due to the unprecedented demand for deferrals.
- If your deferral period is approaching the end, you should make sure you have arrangements in place with your lenders as after the deferral period finishes, the lender may decide how to report any changes.
- There is a process for fixing any issues with your credit report. We refer you to the Australian Government resources at https://moneysmart.gov.au/managing-debt/credit-scores-and-credit-reports which details the processes and contacts.
- Remember, the credit score is based on the credit report. So fixing any issues with the credit report should have a positive impact on your credit score. And a better credit score usually means a better outcome when you discuss a boat, car, bike or caravan loan with Jade Finance.
There may be no issues to fix with your credit report, but most authorities recommend you check it on an annual basis.
Activating Your Plans
With low interest rates still dominating the financial scene and sellers of consumer goods – car, bike and boat dealers and caravan manufacturers – more keen than ever to move stock, now could a great time to move forward with your plans.
- On the motor vehicle scene, there are new models arriving on the Australian market throughout the year and throughout the different car categories from budget to top of the range luxury.
- On the boat scene, with all the major boat shows cancelled for 2020, new boat dealers in particular will be relying on traditional channels to attract buyers.
- According to industry news, caravan sales have seen an increase due, some think, to border closures and limited travel and holiday options. New caravans are often built to order so if you’re planning a summer caravan holiday, you’ll want to get your order in fast.
While browsing any goods online or in the showroom, keep the Jade Finance calculator at hand for a quick estimate on repayments. To be even more organised, contact Jade Finance for a pre-approved loan before you start looking.
To discuss your caravan, bike, car or boat loan requirements contact Jade Finance 1300 000 008
DISCLAIMER: THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. INFORMATION ON INDIVIDUAL VEHICLE SPECS IS SOURCED FROM THE MANUFACTURER WEBSITE. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.