Personal loans or buy now pay later

If you’re struggling with money, you’re not alone.

Your bank has a dedicated financial assistance team ready to listen and talk about your options.

Be open and realistic when talking about your financial situation. Under the Banking Code of Practice, your bank must consider how they can help you with your financial difficulties.

Contact your bank as soon as you can. The sooner you do, the sooner they can find a solution that’s right for you.

If you have personal loans or buy now pay later accounts from different providers, you need to contact each provider. That is when talking to a financial counsellor might be something you should consider.

Start by doing a budget. This can help keep your finances on track.

Consider your income, expenses, debts, and any savings and investments. Think about where you could:

• cut back on spending
• reduce your expenses
• consolidate any debts.

To help you budget, try the Moneysmart budget planner.

Your bank may ask about your income, expenses and any changes you intend to make when discussing options to help you.

Depending on your circumstances and your bank, there may be ways for you to keep repayments on track. These may include:

Consolidate multiple loans into a single loan

If you have multiple personal loans, buy now pay later accounts or credit cards, you may be able to consolidate them into one personal loan. You can then pay off the balance with regular instalments.

Get temporary relief from repayments

Ask your bank if you can temporarily defer your monthly repayment for your personal loan, or your regular buy now pay later repayment.

Reduce repayments

Ask your bank if they can reduce the interest rate for your personal loan or reduce your minimum repayment.

Your bank may ask for information to better understand how they can help you. This may include:

• Proof of income – such as recent pay slips, a profit and loss statement for self-employed individuals, rental income, Centrelink income, notice of termination or termination payments.
• Expenses – such as rent or home loan payments, summary of outstanding bills, credit card statements, loan repayments from other financial providers and essential living expenses.

Your bank can ask for this information within 21 days of you contacting them. You must provide the information within 21 days of the bank asking. Your bank must tell you in writing if they decline your request.

Your credit score is based on personal and financial information about you that’s kept in your credit report.

Your credit report shows whether you’ve made your loan or credit card repayments on time over the past 2 years. It may not show whether you have buy now pay later debts – it depends on who your lender is.

Missing or making a late repayment usually lowers your credit score. A lower credit score may affect your ability to get finance. Your credit score may get worse with each payment that you miss without speaking to your bank.

If you cannot make your loan or credit card repayments on time, it’s important to contact your bank. Depending on your circumstances, you and your bank may agree to a financial hardship arrangement. A benefit of a financial hardship arrangement is that your credit report shows that you made repayments on time. This is for the period of the arrangement – as long as you meet any terms agreed with the bank, such as making lower repayments.

Your credit report includes information that shows you’re in a financial hardship arrangement. This stays on your credit report for one year, then disappears. It doesn’t include the reason or the details of the arrangement. It doesn’t impact your credit score. Credit reporting bodies cannot use financial hardship information to calculate your credit score.

Avoid companies offering to repair your credit score for a fee. You can get one free copy of your credit report every 3 months from each of the credit reporting bodies. These are Equifax, Experian and illion.

The Moneysmart website explains how credit reporting works and how to get yours for free.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not then satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

If you’re struggling with money, you’re not alone. Your bank is ready to listen and talk about your options.

Be open and realistic when talking about your financial situation.

If you have personal loans or buy now pay later accounts from different providers, you need to contact each provider. That is when talking to a financial counsellor might be something you should consider.

If you continue to miss your loan repayments, it’s essential to keep talking to your bank. If you don’t, your bank may take further action, including charging you late fees.

If the loan is secured against an asset – such as a car or boat – your bank may take possession and sell it to pay off the amount owing on the loan.

In rare circumstances, the bank may sell your debt to a debt collector. You then need to work with the debt collector to pay off the amount owing. Debt collectors must consider any financial hardship requests you make when paying off this debt.

If you don’t contact your bank when you miss repayments and agree to put an arrangement in place, the bank could start legal action to recover the loan.

A default notice is a letter from your bank warning you that your account is in default because you’re behind with your repayments.

If you get a default notice, read it carefully. It will outline steps you can take, timing, and other information that might affect your financial position.

When you get a default notice, you have a limited period of time to ask your bank for help and come to an arrangement. If you don’t come to an arrangement, your bank may start legal action.

It’s essential to stay in touch with your bank. Your bank always looks for ways to help.

If they cannot do that, and you cannot meet the conditions of a default notice, your bank may lodge a legal document called a Statement of Claim.

A Statement of Claim is an application made to the court that sets out how much your bank claims you owe them and why they’re making the claim.

If you receive a Statement of Claim, seek legal advice as soon as possible – within 4 weeks at the latest. If you do nothing, the court may enter a judgment against you, and you may lose the opportunity to lodge a defence, if you have one.

Legal costs relating to the Statement of Claim are added to your loan balance. The sooner you contact your bank, the better. This helps to keep down the legal costs added to your loan.

You can still talk to your bank and try to come to an arrangement about your loan even after receiving a Statement of Claim.

If you need help, there are services that offer free financial advice, legal advice and mental health support. See our list of support services.

Help is available if you cannot afford a lawyer.

Legal Aid provides free legal advice and services to disadvantaged people and legal representation for eligible clients.

Community Legal Centres provide free and accessible legal services – especially to people experiencing financial hardship, discrimination, or domestic or family violence.

The law society in your state or territory can give you names of lawyers who may be able to help with your case. The lawyer will explain how much their services are likely to cost. They may take your case ‘pro bono’, which means you don’t have to pay their fees.

To contact Legal Aid, a Community Legal Centre near you, or the law society in your state, see legal support.

Defaulting on your loan negatively impacts your credit score. The exception is buy now pay later debts, which may not show on your credit report depending on who your lender is.

The more overdue your payment, the greater the impact. If your bank takes legal action against you, this can further impact your credit score. A poor credit score can affect your ability to get finance, get a phone contract or sign up to a new energy provider.

Your bank will tell you if they make a report about a default to a credit reporting body.

Avoid companies offering to repair your credit score for a fee. The Moneysmart website explains how credit reporting and credit scores work, what you can fix and how to do it for free.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not then satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.

If your loan repayments are back on track, it’s essential to look at what else has changed.

Your bank is ready to listen and help you move forward.

The sooner you contact your bank, the sooner you can start.

Suffering a financial loss can shake your confidence and leave you feeling helpless.

A good place to start to get back on track is to call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor. Financial counsellors are qualified professionals. They provide free, independent and confidential information and advice. They can help you better understand and manage your finances.

You can also contact Beyond Blue on 1800 512 348. They offer a wellbeing and mental health support service.

Getting through each day may seem a challenge after a financial loss. But as your finances start to improve, things will get better.

Start by working out where you are right now, and then think about where you want to be in the future.

Consider your income, your expenses, your debts and what savings you have to support you.

Start by doing a budget. This can help keep your finances on track.

Consider your income, expenses, debts, and any savings and investments. Think about where you could:

• cut back on spending
• reduce your expenses
• consolidate any debts.

To help you budget, try the Moneysmart budget planner.

Your bank may ask about your income, expenses and any changes you intend to make when discussing options to help you.

While you want to get your finances back on track as soon as possible, you need to be patient with financial realities.

If your expectations are unrealistic, you may get discouraged. Instead, set a realistic timeframe and work towards that as a goal.

As you start to get your finances back on track, try to build a savings buffer.

Put aside a small amount from your income each week to start building a safety net. This helps deal with unexpected costs or financial shocks. It may also help you avoid credit options that could put you further in debt, for example payday loans.

Even putting aside a small amount can make a difference. The important thing is to do it regularly.

Learning more about how to manage your finances helps you recover and make more informed decisions in the future.

There are plenty of online resources about personal finances and managing debt. Call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor about where to start.

Don’t be afraid to reach out and ask for help if you’re feeling stressed about your financial situation.

The first step is to contact your bank as soon as you can. Your bank is there to help you.

The National Debt Helpline offers a free, independent and confidential service to help people who are having trouble with their money. Call the National Debt Helpline on 1800 007 007 or visit their website to talk to a financial counsellor.

There are also other services that offer free financial advice, legal advice and mental health support. See our list of support services.

If you’re not happy with your bank’s response, you can make a complaint to your bank.

In many cases, your complaint will be resolved between you and your bank with no further action needed.

If you’re not then satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent complaints scheme. It provides a way of resolving disputes without having to go to court. The AFCA’s decision is binding on the bank.

If you need support to make a complaint, call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor.