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Banks prepare for mass customer call-outs on deferred loans

A relatively small but growing number of struggling borrowers who put their mortgages or business loans on hold in response the coronavirus crisis are resuming repayments, new industry figures show.

As part of the banking industry’s response to the crisis, Australian lenders since March have allowed $274 billion in home loans and small business loans to be deferred for up to six months, with the possibility of further loan extensions.

Australian Banking Association chief executive Anna Bligh: "Customers know what's best for them."

Australian Banking Association chief executive Anna Bligh: “Customers know what’s best for them.”Credit:Alex Ellinghausen

From late this month, as some customers start to approach the six month mark, banks are contacting borrowers to determine if they will be able to resume repayments in part or in full.

Figures released on Sunday night by the Australian Banking Association showed that at the end of July, about 13 per cent of customers with deferred loans had resumed repayments, and the banks estimated a further 100,000 people began resuming payments in August.

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