Struggling with repayments? Prepare for the hardship conversation early

A repayment problem can be difficult to explain when the household budget is already under pressure. Before calling a lender, it helps to turn the worry into a short account of what has changed, what payment is coming up and what is affordable now.

The issue is on the regulator's agenda. In its 2026-27 supervisory priorities, announced on 30 September, ASIC included lenders' financial-hardship practices among the areas receiving attention.

That announcement does not grant every borrower a particular repayment arrangement. It does make this a useful moment to understand the existing process and the help available before a missed payment becomes a recurring problem.

This is general information. The suitable response depends on the loan and the borrower's circumstances.

Start with a short, accurate picture

ASIC's Moneysmart hardship guidance recommends contacting the lender and explaining the difficulty. The conversation may involve income, expenses, the reason for the problem and what payments the borrower can manage. A lender must consider a request for hardship assistance, but that does not mean every proposed arrangement will be accepted.

Preparation does not require a polished presentation. A page with the next payment date, current income, essential expenses and the change causing difficulty is a useful starting point.

Separate what is known from what is uncertain. If work hours have fallen, record the income actually being received. If a return to previous hours has not been confirmed, do not build the proposal around treating it as certain.

That distinction can make the conversation more realistic. A temporary difficulty with a known end date is different from a budget that no longer works and has no clear recovery point. Neither needs to be disguised to make the request sound more acceptable.

Understand the proposal before agreeing

Moneysmart describes possible changes such as a temporary repayment deferral or a variation to the loan arrangements. The available option depends on the situation. If an agreed arrangement later becomes unaffordable, contact the lender again rather than assume the original plan can still be maintained.

For any proposal, ask practical questions. What payment is required, and from when? Will interest continue to accrue? Does the arrangement change the loan's length or later repayments? What happens when the temporary period ends?

These are questions to put to the lender, not predictions about the answer. The aim is to understand the full arrangement, including what happens after the immediate pressure has eased.

Request the details in writing and compare them with the conversation. If a term is unclear, ask for an explanation before relying on it. A lower payment this month is easier to assess when the borrower also understands the next review and the remaining obligations.

Keep the record somewhere private. A general note about the call can be useful without circulating account numbers or documents through a public discussion group.

Get support with the conversation

A borrower does not have to work through the figures alone. Moneysmart explains that financial counselling is available through free, confidential services. Counsellors can help people understand their finances, deal with creditors and consider available support.

The National Debt Helpline is listed at 1800 007 007. Check its current hours and contact options through the official service. Free financial counselling is different from a business charging for debt-management or consolidation services.

A counsellor can also help someone organise the questions they need answered. That can be valuable where several debts, irregular income or competing bills make it hard to explain the situation in one call.

Financial counselling is not a substitute for legal advice. If legal action or a formal notice is involved, seek appropriate legal assistance promptly rather than assuming a budget conversation will address every deadline.

Bringing a trusted support person to a conversation may help some borrowers, but the lender's identity and authority checks still apply. Ask how the person can assist without sharing passwords or giving unnecessary access to an account.

If the response does not resolve the issue

Moneysmart's complaint guidance recommends raising the problem with the business first, explaining what happened and the outcome being sought, and keeping a record. For eligible unresolved financial disputes, the Australian Financial Complaints Authority provides an external complaint route.

A complaint is easier to follow when it identifies the request, the response and the remaining issue. For example, the concern might be an unexplained decision or an arrangement whose written terms differ from what was understood. Those are illustrative possibilities, not claims about a particular lender.

Check the relevant complaint process, eligibility and time limits. An external complaint is not a promise that a debt will be waived or that every requested outcome will be ordered.

Leave the call with a next step

Before ending a hardship conversation, confirm who will respond, how the response will arrive and what the borrower needs to provide. Write down the next date to check in.

If something changes while the request is being considered, update the lender with the new information. A proposal built on accurate figures is more useful than one that depends on income the household may never receive.

If a response has not arrived by the agreed date, follow up through the lender's published channel and refer to the earlier request. Keep the figures current so the next conversation reflects what the household can actually manage.