This fact sheet contains some important information to help you understand the process when applying for financial assistance on your home loan, and what you need to know about loan repayment holidays.
Financial difficulty occurs when you’re having trouble meeting your repayment obligations like paying bills or making repayments on your loans.
This can occur because of an unexpected event or change (such as illness or injury, becoming unemployed or being affected by a natural disaster or pandemic like Coronavirus).
If you are experiencing financial difficulty, depending on your situation you can apply for financial assistance.
Applying for financial assistance by phone
You can apply for financial assistance by contacting us on 1300 650 931 to discuss your situation and the options which may be available to you.
A request for financial assistance can be made by any party to the loan however, if the loan has multiple borrowers, we will normally require all parties to supply information to us which will allow a more thorough assessment of the application.
We will need to understand your unique situation to be able to consider your request for financial assistance and discuss your options. This may include asking you:
The reasons why you need financial assistance
An indication of how and when you think your situation will improve
Whether you can continue to make any repayments to your loan and over what period
To provide a statement of financial position, which sets out your income and expenses, as well as relevant supporting documents.
Applying for financial assistance via the website
When an application for financial assistance is made via the website, Pepper Money will be in contact with you within 5 working days.
Please note that your direct debit payments will not be automatically suspended as a result of submitting a request via the website.
Loan repayments which are due shortly
We do understand customers may have a repayment due in the next few days. If your next loan repayment is due within the next 5 working days and you are unable to pay it, please call us on 1300 650 931 between 8am to 6pm (AEST/AEDT).
If your scheduled repayment is deducted before we contact you, any arrears or missed payment fees will be resolved when we contact you.
Confirming your financial assistance plan
Once you have completed an application for financial assistance, you will receive confirmation of the details of your approved financial assistance plan via letter or email. We will outline the details of the variations to your loan account and your temporary repayment schedule during the assistance period.
What you need to know when your repayment holiday ends
30 days before the end of your repayment holiday, Pepper Money will contact you to let you know that this arrangement is coming to an end and that your loan repayments will soon recommence. Read more about the process here.
Financial assistance in the form of a repayment holiday
Typically, a repayment holiday is a short-term suspension of loan repayments because of financial stress. In other words, it is a temporary repayment break which involves putting a pause on making your monthly contractual repayments for a temporary period of time, as agreed with us.
If you have applied for assistance with Pepper Money and we have agreed to pause your repayments, interest will continue to be added to your loan account, but because payment for it will be delayed, the additional interest will be added onto your overall loan balance. This will mean that in the longer term, your repayments will most likely increase for the remainder of your loan term. Keeping this in mind, and assuming you can, you may choose to make some repayments during the financial assistance period.
Calculate the impacts of deferring your home loan repayments using our Deferral Calculator here.
As everyone’s circumstances are different, the exact length of time for the repayment break will depend on your individual situation.
Direct debits are not automatically cancelled when an application for financial assistance is received. When you speak to us, we will discuss your options which may include cancelling direct debit repayments to prevent additional fees or charges to the loan.
Your repayments will be paused during the repayment break; however, it is important to note that interest will continue to accrue and will be added to your loan balance. At the end of the repayment holiday, your loan repayments will likely increase to ensure your loan is repaid within the original loan term. We will contact you prior to the end of the repayment break to discuss your circumstances.
Calculate the impacts of deferring your home loan repayments using our Deferral Calculator here.
While you are not making repayments on your mortgage, the unpaid interest you would normally pay each month will be added to your overall loan balance.
For example, let’s say you have a $300,000 mortgage and normally pay $825 in interest each month. This interest amount of $825 will continue to be added to your loan balance each month while any repayments are not made. This is called ‘capitalising’ the interest on your loan.
You can make repayments during the repayment holiday period if you are able to. These additional repayments will reduce the interest being added on to your loan during the repayment break period and result in the total loan balance being less at the end of the repayment holiday period than if no additional repayments were made during this time. This may result in less interest to be repaid over the term of your loan.
You need to be aware that if you have excess funds in your account, they will be used to make your next scheduled repayment even if you have been approved for financial assistance. The funds will be debited 14 days after the repayment due date.
Customers who receive financial assistance from Pepper Money may have their credit history negatively impacted.
Customers who receive financial assistance from Pepper Money if any repayments are missed during the period of financial assistance. If you have any questions about this, please do speak with us. To learn more about your credit health, you can visit CreditSmart.org.au.
For customers who are under financial assistance arrangements with Pepper Money, you will not be charged Default, Arrears or Dishonour fees during this time, and we will not apply additional default interest on amounts in arrears.
If you’ve recently been granted financial assistance from Pepper Money, you may still receive a system generated late payment notice via SMS or letter. Please disregard this notice and be assured that you will not be charged late payment fees or default interest, and your credit rating won’t be impacted. If you still have questions, please contact our Customer Service team on 1300 650 931.
30 days before the end of your repayment holiday, Pepper Money will contact you to let you know that this arrangement is coming to an end and that your loan repayments will soon recommence. Learn more about the process here.
Pepper Money is committed to assisting customers who are experiencing problems making repayments on their loan wherever possible. We will contact you each month to understand your current situation.
If you still have questions, please contact us on 1300 650 931.
Financial Counselling Organisations
You may also want to obtain support from an advice professional, or a financial counsellor to assist you to understand your options.