Unforeseen financial hardship

We understand that life can throw a few curve balls from time to time. If you find yourself unable to reasonably keep up your loan repayments, we call this Unforeseen Financial Hardship and we can help.

If you have been affected by an Unforeseen Financial Hardship (UFH), you can request that we vary the terms of your loan contract. Causes can be personal hardship (e.g. illness or injury), a major life event (e.g. death of a loved one, loss of employment), or another reasonable cause.

COVID-19: if the pandemic has impacted your employment and you need to pause your loan repayments, apply for Unforeseen Financial Hardship as soon as you can. For example, if have reduced hours or lost work (redundancy) assistance is here to help you get through, and we have streamlined the application process for COVID-19 affected customers.

On this page:

What you need to know before applying for hardship

We want to help our borrowers when unforeseen circumstances creates financial hardship - it is better for all concerned to work together through a difficult situation.

Loans are still repaid (just over a longer term)

While Unforeseen Financial Hardship assistance doesn’t remove the obligation to repay a loan, it is intended to help make loan repayments more manageable during a time of financial difficulty. Assistance could be pausing regular repayments for a period of time (sometimes called a “repayment holiday”), or reducing regular loan repayments to a more manageable amount, or a combination of the two.

Interest continues to accrue

It is important to understand that loans continue to accrue interest on the outstanding loan balance if repayments are paused, and this additional interest is added to the cost of the loan. This means a borrower will pay more interest on their loan than the original loan agreement due to the term of the loan being longer.

It's always a good idea to get rid of debt as quickly as possible and this should be a key goal when budgeting.

Qualifying for Unforeseen Financial Hardship

COVID-19: If you have a letter from your employer documenting reduced hours or redundancy, apply today if you are unable to make your loan repayments. We have made the process simpler and faster for people impacted by the pandemic.

If a borrower finds themselves unable to reasonably make their loan repayments - regardless of the circumstances - we encourage them to talk our Support Team about how we can help.

We encourage borrowers to seek Unforeseen Financial Hardship assistance from us if they can demonstrate that making loan repayments would create or increase financial hardship, due to circumstances that could not have been reasonably foreseen. Those circumstances could be personal hardship (e.g. illness or injury), a major life event (e.g. death of a loved one, loss of employment), or another reasonable cause.

If in doubt, talk to us - we are here to help.

What support is available

In general, the assistance we can provide allows borrowers to spread repayments over a longer loan term than originally intended. This can be achieved by providing:

  • A postponement of repayments for a set time, or;
  • An extension to the original loan term (which could reduce the amount paid in each regular repayment), or;
  • A combination of the two, for example: a postponement of repayments for a set time plus an extension of the original loan term.

NOTE: it is possible to pause repayments for a set time but keep to the original loan term. However, catching up would need an increase in the regular repayment amount once repayments started again - talk to us to find out more.

Hardship and your credit file

When a borrower is receiving assistance due to Unforeseen Financial Hardship this status is included in our reporting to credit agencies and may be included in your credit file. This means that the hardship status may be seen in your credit history while this status is in place. Information like this is important to responsible credit providers so they can ensure they provide appropriate products and services to customers experiencing financial stress.

Once a borrower is no longer receiving assistance the status is no longer reported.

COVID-19: The Credit Reporting Industry have adopted measures to better understand and address the impact of the pandemic. When reporting to credit agencies we now indicate if payments are paused due to COVID-19 or normal hardship.

Apply for Unforeseen Financial Hardship

COVID-19: we have made the process simpler and faster for borrowers impacted by the COVID-19 pandemic. When applying, in most cases we will only require a letter from your employer documenting your change in employment status, or changes in wages or hours.

To make an application you need to:

  • CONTACT US
    Simply contact us by telephone, email or post - see contact details below. If your request is urgent, use our telephone or email option.
  • PROVIDE INFORMATION
    Clearly explain your reasons for applying. Provide as much supporting documentation as possible that relates to your hardship event. For example, provide us an email or letter from your employer if you are facing reduced hours or unemployment, or your doctor if you have a incapacitating health event.
  • REQUEST WHAT HELP YOU NEED
    Clearly request one of the following:
    • A postponement of your repayments for a set time.
    • An extension to the original loan term.
    • A combination of the above – i.e. extend your term, with a postponement of some of your repayments.

By making an application, you are confirming your belief that you will be able to meet your debt repayments if these changes are made.

You cannot apply for Unforeseen Hardship within four months of a previous application, unless the hardship is related to a different matter.

What happens when you apply

Once we have received your application, we will contact you in writing outlining our process. If we do not require any further information from you, a decision will be made within 21 working days of receiving your application.

If we do request further information, please ensure you provide this as soon as possible.

Ready to apply?

You can apply by telephone, email or post, but if your request is urgent, please use our telephone or email options:

Telephone:
0800 427 666

Email:
customersupport@harmoney.co.nz

Post:
Unforeseen Financial Hardship
Harmoney,
Ground Floor,
79 Carlton Gore Rd,
Newmarket,
Auckland, 1023

Considerations if your loan repayments are paused

If you qualify for assistance and your repayments are paused, there are some things to keep in mind otherwise you could end up paying interest you may be able to avoid.

We are committed to help you with your personal loan so please speak to us if you wish to restart your repayments or if you would like to hear about other ways to help you pay off your personal loan faster.

Loan balance and interest

When repayments are paused the outstanding loan balance remains as it is until repayments restart. In addition, the outstanding loan balance continues to accrue interest, adding to the total amount of interest that will need to be paid. Because of this, we encourage borrowers to give Unforeseen Financial Hardship assistance careful consideration before pausing repayments. However, we offer the assistance for a good reason, and could be the help a borrower needs during a time of financial difficulty.

Restarting repayments sooner if circumstances improve

Repaying a loan quicker is usually better because it costs less. Therefore, should circumstances improve and it becomes possible to start repayments sooner, borrowers should consider doing this.

For example, consider a borrower who returns to work and starts receiving wages 6 weeks into a 12 week repayment “holiday”. If the income from work provides enough money to restart repayments without creating financial stress, the borrower may want to consider restarting repayments, and avoid paying 6 weeks of additional interest.

Making ad-hoc repayments while repayments are paused

In some situations, borrowers receiving Unforeseen Financial Hardship assistance may want to make ad-hoc repayments while their regular loan repayments are paused.

If this is the case, borrowers with paused repayments should talk to us before making unscheduled repayments.

Information for lenders

If Borrowers find themselves unable to reasonably keep up their loan repayments due to an unexpected life event, they can apply for Unforeseen Financial Hardship.

There are regulatory criteria that apply before a Borrower may have Unforeseen Financial Hardship granted, and not all applications will be successful.

Please remember that Borrowers who have their contracts varied because of Unforeseen Financial Hardship are still expected to repay their loan in full – it may just take longer than initially expected.