Almost six million Australians struggled to make loan repayments last year, according to new data.
Australian Securities and Investments Commission (ASIC) research found that despite 47 percent of the adult population struggling to meet debt payments in the past 12 months, a third said they would not seek assistance from their bank.
ASIC Commissioner Alan Kirkland said the Moneysmart report found that of those who would not seek help, half were worried it would cost them more in the long run, 32 percent feared it would negatively impact their credit scores and 31 percent did not think their lender would do much to help.
“In fact, Australians say they would rather sell their belongings and assets (42 percent) or get a second job (40 percent) before applying for financial hardship assistance,” Commissioner Kirkland said.
“For many Australians, the path to seeking help feels daunting, confusing, and challenging.”
On the same day that Newsreel revealed mortgage defaults were lower than pre-COVID levels, Commissioner Kirkland said more than half (55 percent) of people surveyed were not aware they were entitled to ask their bank or lender for financial hardship assistance.
“Customers in hardship are entitled under the law to request assistance.
“The message for Australians experiencing financial stress is that banks or lenders have a responsibility to support customers. If you are worried about being able to make your repayments, you’re entitled to ask your bank or lender for help.”
Key survey findings include:
- Lack of awareness of available assistance programs (37 percent), not knowing where to go for help (33 percent) and not knowing which sources to trust (31 percent) are the top 3 potential practical barriers.
- Anxiety and stress caused by hardship (51 percent), feeling shame or embarrassment (40 percent) and feeling of failure (40 percent) are the most common potential emotional barriers Aussies face.
- Almost all (96 percent) of those surveyed who experienced financial hardship, experienced negative side effects, including stress or anxiety (73 percent), loss of sleep (56 percent) or a decline in physical health or appearance (41 percent).
