Q&As for lenders – dealing with financial assistance requests

It has been more than a year since interest rates began rising in Australia. As a result of the increasing pressure on consumers to meet their loan repayment obligations, Australian Credit Licensees (referred to as credit issuers in this blog) are likely to see an increasing number of borrowers who are suffering from financial difficulties and should be prepared to deal with requests for hardship assistance.

This blog includes some common questions that might be interesting to credit issuers in dealing with requests for financial difficulty assistance.

Legal basis for financial difficulty assistance

Section 72(1) of the National Consumer Credit Code ("NCCC") gives a consumer the right to request a hardship variation for a facility regulated by the NCCC which includes most personal home loans, credit cards, personal loans and investment property loans entered into after 1 July 2010.