With banks releasing various loan relief packages amid the coronavirus pandemic, a Western Australia-based Loan Market broker said he has received hundreds of queries from clients seeking help.
Welshpool-based Loan Market broker Balpreet Bal, senior finance specialist at WA Prime Finance Solutions, told the Elite Broker podcast that his brokerage had been sending out communications to clients about the available COVID-19 packages and had been inundated with queries.
Mr Bal, who recently won WA Broker of the Year and Best Residential Broker (The Adviser’s Better Business Awards WA 2020), said the emails reportedly resulted in about 100 phone calls a day from its existing client database.
“They wanted to get in touch [and find out] what their options are if they lose their jobs, while some people have already lost their jobs,” he told the podcast.
“It’s really important for us as brokers to prepare the clients for this pandemic because they want to be able to afford these repayments.”
While Mr Bal commended the banks for announcing the loan relief packages, which included measures such as repayment holidays, he emphasised that a broker’s role is to educate clients about how these repayment holidays work in practice.
“What happens if interest is added on to their loan? Repayments will go up once they come out of it,” Mr Bal said.
“We need to educate them on that as well, so that’s what I’ve been doing for the last two days.”
Mr Bal said his office was helping clients by speaking with them and pointing them to resources that provides more information around the packages.
His brokerage, which predominantly has a client base of first home buyers, has always educated clients around preparing themselves for unexpected events when purchasing their first home and taking out their first mortgage, including exploring the option of having income protection in place in the event that they lose their jobs.
If they do not have income protection, Mr Bal believes it is important for them to accumulate sufficient savings to cover at least three months’ worth of mortgage payments as it may take that long to find employment again.
“That was my thinking. But this global pandemic: no one would [have] assumed this would happen. So, how would we prepare for that?” he asked.
Mr Bal’s comments came after several lenders announced they would allow small-business customers (and some mortgage customers) to defer their loan repayments for six months in response to the economic fallout from the coronavirus outbreak.
To hear more from Balpreet Bal, tune in to The Adviser’s Elite Broker podcast.