Will hardship affect my credit score?

Not if handled correctly. If you contact your lender before missing payments and they agree to a hardship arrangement, it typically won't be reported negatively. However, if you miss payments without an agreement, your credit will be affected.

How do I apply for hardship?

Contact your lender directly - call, email, or use their hardship request form. Explain your situation and provide evidence (termination letter, medical certificate). They have 21 days to respond with a decision.

Can lenders refuse a hardship request?

They can, but must have a valid reason and explain it. You can dispute unreasonable refusals through the Australian Financial Complaints Authority (AFCA). Most lenders prefer to help rather than deal with defaults.

Hardship Payment Calculator

Calculator

Plan for temporary reduced loan payments during financial difficulty

Free to useNo data storedAI insightsUpdated: February 2026

Facing temporary financial difficulty? Lenders have hardship provisions to help. This calculator shows how reduced payments affect your loan and helps you understand your options for getting through tough times.

Enter Your Details

Real-World Examples

Job Loss Recovery

Janet lost her job. She has $18,000 remaining at 11%, paying $450/month with 48 months left. Can only afford $150/month for 4 months.

Inputs Used:

balance:18,000payment:450reduced:150months:4

Paying $150 for 4 months adds ~$600 to total interest and extends loan by 3 months. Much better than defaulting.

Medical Recovery

David is recovering from surgery. $12,000 at 10%, paying $280/month. Needs 2 months interest-only ($100/month).

Inputs Used:

balance:12,000payment:280reduced:100months:2

Two months interest-only adds $360 to loan and extends by 1.5 months. Very manageable recovery.

Frequently Asked Questions

Glossary

Hardship Variation

A temporary change to your loan terms due to financial difficulty - legally required for lenders to consider.

Payment Pause/Deferral

Temporarily stopping payments entirely. Interest still accrues and must be repaid later.

Interest-Only Payments

Paying just the interest during hardship - balance stays the same but doesn't grow.

Related Tools

Emergency Fund Calculator

Build savings to avoid future hardship

Variable Income Planner

Plan for income fluctuations

Debt Consolidation Calculator

Simplify debts after recovery

How to Use

1Enter your current loan balance and repayment
2Add your loan interest rate and remaining term
3Set what you can realistically afford during hardship
4Estimate how long the difficulty will last
5See the impact and plan your recovery

Key Information

Australian lenders must consider hardship requests - it's the law
Reduced payments usually extend your loan term
Interest continues accruing during hardship periods
Hardship doesn't usually affect your credit score if managed properly

Pro Tips

Contact your lender BEFORE you miss a payment - they're more helpful early
Document your situation: job loss notice, medical certificates, etc.
Ask about all options: reduced payments, interest-only, payment pause
Get the agreement in writing before assuming anything

Avoid These Mistakes

Waiting until you've missed payments to ask for help
Not understanding that interest still accrues during hardship
Assuming hardship means loan forgiveness - you'll pay eventually
Not planning for how to catch up after the hardship period

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026