THE BIG BANKS ARE INCREASING THEIR LENDING

The COVID pandemic caused high unemployment rates and cash flow problems for many people, and this caused them to default on their home loans and, in many instances, have their homes repossessed. Some banks put-payment holidays in place, while others offered special lending schemes to help customers through this tough time.

The Australian Reserve Bank recently raised its benchmark interest rate from a record low of 0.10% to 0.35% on the 3rd of May, 2022. It did this to combat inflation caused by its fiscal policy (increase in government spending) and the cut in its benchmark rate.

The fiscal policy managed the fallout of the COVID pandemic, along with the Reserve Bank’s decision to cut their benchmark rate. This served as a buffer against the pandemic.

The virus containment effort has stimulated the economy. This can be seen in increased housing prices and improved job markets. Consumer confidence is also growing. When consumer confidence is high, banks are willing to increase lending. You are more likely to be able to repay your loan in a good economy.

Credit is necessary for a prosperous nation; banks understand this and play a pivotal role in how we spend. When their clients prosper, so do the banks. Banks have made accessing credit easier by making online platforms more accessible, with streamlined processes to make it easier to access credit.

While it’s natural to feel apprehensive, you can always contact your banks regarding any concerns. The bank will ask for your supporting documents and an affordability assessment, and you’ll be approved for an amount you can comfortably afford.