Borrow
How will a bank treat a COVID-19-affected borrower?
Are you looking for some clarification around the way banks can treat loan customers who have a need to access COVID-19 support packages, or wondering if there’s a catch?
How will a bank treat a COVID-19-affected borrower?
Are you looking for some clarification around the way banks can treat loan customers who have a need to access COVID-19 support packages, or wondering if there’s a catch?
The Australian Prudential Regulation Authority (APRA) has noted that many banks have recently announced COVID-19 support packages that provide affected borrowers – mainly home loan and small-business loan customers – with options to defer repayments on loans for up to six months.
All four major banks and a number of non-majors have already indicated they will be putting a number of measures in place to support their customers through the uncertainty of the COVID-19 pandemic.
According to the regulator, where a borrower who has been meeting their repayment obligations until recently chooses to take up the offer not to make repayments as part of a COVID-19 support package, the relevant bank does not need to treat the period of the repayment holiday as a period of arrears.
Loans granted a repayment deferral under a COVID-19 package also will not be considered as “restructured”.
In a similar vein, the credit reports of individuals who are required to access support packages are unlikely to be detrimentally affected, according to one such credit reporting business.
Steven Brown is the director of bureau engagement at credit reporting business illion.
He told nestegg’s sister brand Mortgage Business that they would not be counting deferments or variations as “credit events”.
“Where a borrower seeks and is granted varied terms for loan repayments under a hardship agreement, the information provided to a credit bureau is typically different from what is reported under a normal loan repayment schedule.”
He explained that it’s currently standard practice for lenders to omit providing loan repayment information to credit bureaus where hardship arrangements are in place.
As a result, any delayed payments “are not visible to new lenders and are not included in the borrower’s credit score”.
RELATED ARTICLES
About the author
About the author
Banking
Banks urged to embrace existing payment technologies over AI hype
In the rapidly evolving landscape of financial technology, the focus has increasingly shifted towards artificial intelligence (AI) as the next frontier for innovation. However, Ian Boyd, General ...Read more
Banking
EMEA banks enjoy profit growth amid revenue challenges in 2025
In a year marked by economic turbulence and geopolitical uncertainties, the largest banks across Europe, the Middle East, and Africa (EMEA) have reported a paradoxical trend: shrinking or stagnant ...Read more
Banking
Australian major banks demonstrate resilience amid economic uncertainty
In the face of economic headwinds, Australia's major banks have reported robust half-year results, showcasing their resilience amid rising uncertainty. According to KPMG’s Australian Major Banks Half ...Read more
Banking
RBA's new ruling on card surcharges sparks debate among businesses and banks
In a significant move aimed at enhancing transparency and fairness in the Australian payments landscape, the Reserve Bank of Australia (RBA) has announced the removal of surcharging on debit, prepaid, ...Read more
Banking
Australian SMBs lose two business weeks annually to late payments, report finds
In a startling revelation, the latest report by GoCardless, a global bank payment company, highlights the crippling impact of late payments on small and medium businesses (SMBs) across AustraliaRead more
Banking
Brighten’s reverse‑mortgage bet: why a niche product could be non‑banks’ next profit engine
Brighten has created a dedicated reverse‑mortgage leadership post, signalling a strategic push into equity release as Australia’s demographic curve tilts older and wealth concentrates in housingRead more
Banking
Why banks are moving at different speeds after the RBA hike — and how to turn timing into advantage
The Reserve Bank’s latest cash rate move has triggered an uneven response from lenders — a pattern that reveals more about funding structures, risk appetites and systems readiness than headline ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
Banking
Banks urged to embrace existing payment technologies over AI hype
In the rapidly evolving landscape of financial technology, the focus has increasingly shifted towards artificial intelligence (AI) as the next frontier for innovation. However, Ian Boyd, General ...Read more
Banking
EMEA banks enjoy profit growth amid revenue challenges in 2025
In a year marked by economic turbulence and geopolitical uncertainties, the largest banks across Europe, the Middle East, and Africa (EMEA) have reported a paradoxical trend: shrinking or stagnant ...Read more
Banking
Australian major banks demonstrate resilience amid economic uncertainty
In the face of economic headwinds, Australia's major banks have reported robust half-year results, showcasing their resilience amid rising uncertainty. According to KPMG’s Australian Major Banks Half ...Read more
Banking
RBA's new ruling on card surcharges sparks debate among businesses and banks
In a significant move aimed at enhancing transparency and fairness in the Australian payments landscape, the Reserve Bank of Australia (RBA) has announced the removal of surcharging on debit, prepaid, ...Read more
Banking
Australian SMBs lose two business weeks annually to late payments, report finds
In a startling revelation, the latest report by GoCardless, a global bank payment company, highlights the crippling impact of late payments on small and medium businesses (SMBs) across AustraliaRead more
Banking
Brighten’s reverse‑mortgage bet: why a niche product could be non‑banks’ next profit engine
Brighten has created a dedicated reverse‑mortgage leadership post, signalling a strategic push into equity release as Australia’s demographic curve tilts older and wealth concentrates in housingRead more
Banking
Why banks are moving at different speeds after the RBA hike — and how to turn timing into advantage
The Reserve Bank’s latest cash rate move has triggered an uneven response from lenders — a pattern that reveals more about funding structures, risk appetites and systems readiness than headline ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
