Glossary
Financial hardship
Financial hardship is when a borrower is unable to meet their repayments because of circumstances such as illness, job loss or a business downturn. For regulated loans, borrowers can ask their lender for a hardship variation.
An example
A borrower whose income drops after an injury contacts their lender to explain and asks for a temporary change to their repayments while they recover.
Why it matters
Contacting a lender early usually gives more options. Free financial counselling is available through the National Debt Helpline, and unresolved complaints may go to AFCA if the lender is a member.
Points to check
If you are struggling with repayments, contact your lender as early as possible and ask about hardship options. For regulated loans, lenders must consider hardship requests under consumer credit law. Business loans may not carry the same protections, but many lenders still have hardship processes. The National Debt Helpline offers free financial counselling, and AFCA can consider complaints about member firms that do not respond appropriately.
Related terms
Further reading: National Debt Helpline