Here are a few things you might consider doing if you find yourself struggling with loan repayments.
Contact your Bank if you’re struggling with loan repayments
With consumer protection legislation in place since July 1 2011, all lenders have a hardship clause in their mortgage contracts, which in essence, encourages empathy from the lender to help you get through this short term issue. Give your Bank a call and be honest and upfront with them and you’d be surprised the leniency they will show. There are options for you, one being your Bank may agree to defer your minimum contracted repayments for a few months. Anyway, please contact your Bank.
Reset your mortgage term
You can ask your Bank to reset your current loan balance over 30 years again, thereby reducing your minimum repayments. It may, in some instances cut your monthly repayments by up to $500.
Switch to interest only repayments
Request a short interest-only term (say 12 months). You can still pay principle and additional repayments at any time but at least the required minimum repayment will be much less than what it is now.
This comes back to budgeting and having a good understanding of where you can cut down on any unnecessary expenses and enlighten you as to where your money is going. Download our comprehensive budget planner to start getting yourself on the right track.
Increase your mortgage to pay off all other personal loans and credit card debt can seriously reduce your overall monthly repayment commitments.
Consider taking on a second job to earn some additional income, or working more overtime, or ask your boss for a salary review. You may even come up with a way to earn additional income from home.
Seek help if you’re still struggling with loan repayments
The last resort would be to seek professional advice from a specialist financial counselor which you can find one by simply doing a google search.