Pause Personal Loan Repayment? Find Relief Fast (2026)

Life can throw unexpected challenges your way, making it difficult to meet financial commitments like personal loan repayments. If you find yourself in such a situation, you might be wondering, "Can I pause my personal loan repayment?" This guide aims to provide clarity, helping you understand your options and navigate the process effectively.

Understanding Personal Loan Repayment Pauses

A personal loan repayment pause, often referred to as a deferral or holiday, allows you to temporarily stop making payments on your loan. This can provide much-needed financial relief during challenging times, such as illness, job loss, or unexpected expenses. However, it's essential to know that pausing your repayments isn't a universal right and depends on your lender's policies and the terms of your loan agreement.

Current Market Information and Options

In 2026, personal loan interest rates in Australia generally range from 6.49% to 12%, depending on the lender and your creditworthiness. When considering pausing your repayments, it's crucial to understand the terms and conditions of your loan and what options are available from your lender.

Lender	Interest Rate Range	Repayment Pause Policy
Big Bank	6.49% - 8.75%	Up to 3 months with valid reasons
Friendly Finance	9% - 12%	Case-by-case basis
Online Lender Co	7% - 11%	Up to 6 months for eligible borrowers

Lenders have different policies regarding repayment pauses, often determined by factors such as your current financial situation, repayment history, and the overall terms of the loan. Some lenders, like those available through Esteb and Co's panel of 83+ lenders, may offer more flexibility than others.

Steps to Request a Repayment Pause

If you're considering pausing your personal loan repayments, follow these steps to improve your chances of approval:

1. Review Your Loan Agreement: Before contacting your lender, review your loan agreement to understand the terms related to repayment pauses.
2. Assess Your Financial Situation: Take stock of your current financial status and determine how long you might need to pause repayments.
3. Contact Your Lender: Reach out to your lender as soon as possible to discuss your situation. Be honest and provide any necessary documentation that supports your request.
4. Explore Alternatives: If a repayment pause isn't possible, discuss alternative solutions, such as refinancing or restructuring your loan.
5. Confirm Arrangements in Writing: Once an agreement is reached, ensure you receive written confirmation detailing the terms of the repayment pause.

Expert Tips and Considerations

Securing a pause on your personal loan repayments can offer short-term relief, but it's important to consider the long-term implications:

• Interest Accumulation: Keep in mind that interest is likely to continue accruing during the pause period, potentially increasing the total amount payable.
• Impact on Credit Score: While a formal pause won't directly affect your credit score, any missed payments before the agreement is in place could.
• Future Borrowing: Lenders may view a repayment pause as a sign of financial distress, which could impact your ability to borrow in the future.
• Plan for Resumption: Have a plan in place for resuming payments and managing any increased financial obligations once the pause ends.

Frequently Asked Questions

Q1: Can all personal loans be paused?

A1: Not all personal loans have the option to pause repayments. It depends on the lender's policy and the terms of your loan agreement.

Q2: Will my loan term be extended if I pause repayments?

A2: In most cases, yes. The loan term may be extended to accommodate the paused payments, but you should confirm this with your lender.

Q3: How often can I request a repayment pause?

A3: This varies by lender. Some allow multiple pauses under certain conditions, while others may limit it to once during the loan term.

Q4: Can I pause repayments if I'm ahead on my loan?

A4: Being ahead on your loan might give you more flexibility, but it doesn't guarantee a pause. You'll still need to discuss options with your lender.

Q5: What happens if my request for a pause is denied?

A5: If denied, consider negotiating alternative arrangements, like reduced payments or refinancing through another lender, potentially available through Esteb and Co's diverse lending panel.

Q6: Does a repayment pause affect my interest rate?

A6: Typically, the interest rate remains unchanged during a repayment pause, but the total interest paid over the life of the loan may increase.

Q7: Are there any fees for pausing my loan repayments?

A7: Some lenders may charge a fee for processing a repayment pause. Be sure to ask your lender about any associated costs.