Three phone calls saved me $2,000 a month – here’s what I said to my lenders

When Australia’s economy was travelling well – and it has been for 27 years –  we took out loans on cars and houses, spent up big on our credit cards, ate at fancy restaurants and travelled the world. 

Today, we stand at the end of the world’s longest boom.  And many of us have no idea how to handle it.

With thousands stood down, and businesses ‘paused’ – today’s buzz word for shut – we face the fact that we may not be able to pay our bills.

Take Danielle Hocking, who spoke to the Daily Mail. She was one of the first lining up at Centrelink in Darlinghurst, Sydney.

She was a physiotherapist and over-night, was stood down from her job. As she was lining up, felt horrible about receiving government assistance for the first time in her life.

 “I’m just trying to get any money I can really,” said Ms Hosking, 36.  “I worked as a physiotherapist as practice manager and in client rehabilitation. I’d been there for seven years but my work wasn’t considered essential, so I’ve now lost my job. 

“It’s the first time in my life I can’t get a job anywhere – even with qualifications. I’ve got my own place too so I’m going to have to call the banks, I’ve got no way to pay at the minute.”

Many are in Danielle’s position – we have credit card and car loans, mortgage repayments. And on top of that, we need to get dinner on the table and pay the power bills. But as our savings dwindle, and the bills mount up, where do we turn to for help?

Just before I penned this article, I too, had to think about my options. Within a few weeks, my employer, like so many other, had to reduce my salary and cut my hours.

My rental payments amount to around $800 per fortnight, $600 monthly in fees for my car loan lender as well as around $5,000 in credit card debt. As the panic started to settle in, I knew it was time to make some important phone calls.

Many of us are terrified of calling our lenders. But in extraordinary times like these, everyone is willing to help.  And what surprised – and heartened – me most was that so many were willing to help.

The first, was my car lender. I was nervous. I had never missed a payment and the thought of calling someone to ask for help put my stomach in knots.

“Hello this is Sam speaking,” said the voice on the other end of the line.

There was a long pause before I introduced myself. I explained the situation of my financials.  He was quick to reassure me I was not the only one in the same boat.

Sam had already redirected around 2,000 applications to their financial hardship team, who would be providing options on a case by case basis. I was offered a reduction that would halve my monthly payments to $300, or even pause my bills for several months.

As they are completely inundated, he said someone from the team would be in contact within the next seven to 10 days. The first hurdle done, and what a relief.

It was the same story with my real estate agent. I’m currently paying $400 a week for my rented apartment. But like my car lender, explaining the situation and being upfront made all the difference. And now, I’m paying rent at a 25% reduction.

My final call was to my credit card company – the one I had been dreading. I have still a substantial credit card debt with American Express (from the purchase of too many shoes and not enough shares!). I was expecting a tough reception. 

But it was the same story. While American Express have not yet put any policies in place for financial hardship, I was assured by my operator that things are being discussed, and there was nothing for me to worry about right now.

Making those calls – and making them early – was the best thing I could possibly have done.  And now that I’m over my nerves, I’d recommend it to anyone.

There is nothing to be embarrassed about as everyone is experiencing some form of financial hardship (unless you’re Jeff Bezos).

Here are some tips of what to say to your lenders.

1. Be honest, open and upfront. If you have lost your job, make sure your lenders know so you can work through some options.
2. Don’t get mad and panicky. Remember, these guys would also be going through a mountain of work. You also don’t want to antagonise someone who could potentially stop your repayments for several months.
3. If you can’t pause some of your payments, try and cut a deal where you might be able to pay some of your loan back to your lender.
4. Keep them up to date. Don’t rort the system once you’re back on your feet.

This is what the credit cards are willing to offer.