Loan Payments on Hold? Regain Control Fast (2026)

Life can be unpredictable, and sometimes financial situations arise that make it difficult to keep up with loan repayments. If you find yourself wondering whether you can put your loan payments on hold, you're not alone. Many Australians face the same dilemma, and understanding your options is crucial to managing your finances effectively.

Understanding Loan Payment Holds

Loan payment holds, often referred to as loan deferrals or payment holidays, allow borrowers to temporarily pause their loan repayments. This can provide much-needed relief during financial hardships, such as job loss, illness, or other unexpected expenses. It's important to note that while payments are paused, interest may continue to accrue, potentially increasing the total amount you owe over the life of the loan.

Current Rates and Options Available

In 2026, the Australian lending market has seen shifts in interest rates and loan products. Borrowers considering a payment hold should be aware of the current economic climate and lender policies. Interest rates for personal loans currently range from 6.49% to 12%, depending on the lender and borrower’s credit profile.

Loan deferrals are typically available for mortgages, personal loans, and sometimes car loans. Lenders on Esteb and Co's panel, comprising over 83 lenders, offer various options, making it essential to understand specific lender policies.

Steps to Request a Loan Payment Hold

Here's a step-by-step guide to requesting a loan payment hold:

1. Review Your Loan Agreement: Check your loan contract to understand the terms regarding payment holds or deferrals.
2. Contact Your Lender: Reach out to your lender as soon as you foresee financial difficulties. Be prepared to explain your situation.
3. Provide Necessary Documentation: You may need to furnish proof of your financial hardship, such as a letter of termination from your job or medical certificates.
4. Understand the Terms: Ensure you understand the terms of the deferral, including how interest will be handled.
5. Confirm the Agreement: Once your lender agrees, get the terms in writing to avoid any misunderstandings.

Tips and Considerations

Before deciding to put your loan payments on hold, consider these expert tips:

• Impact on Credit Score: While a deferral may not initially affect your credit score, failing to resume payments as agreed can have negative effects.
• Budget Adjustments: Use the deferral period to reassess your budget and make necessary lifestyle changes to improve your financial situation.
• Explore Alternatives: Consider other options like refinancing or consolidating debts, which might offer lower interest rates or better terms.
• Consult a Financial Adviser: Professional advice can provide a clearer picture of your financial health and help you make informed decisions.

Frequently Asked Questions

• Can I put my mortgage payments on hold? Yes, many lenders allow mortgage payment deferrals, but terms and eligibility vary. Check with your lender for specifics.
• Will a loan deferral affect my credit score? Generally, deferrals agreed upon with your lender should not impact your credit score, but missed payments will.
• Is interest charged during a payment hold? Yes, most lenders continue to charge interest, which can increase the total cost of the loan.
• How long can I defer my loan payments? The deferral period varies by lender, typically ranging from one to six months.
• What happens after the deferral period ends? You'll resume regular payments, possibly with a revised schedule to catch up on missed payments.
• Can I apply for a deferral on a car loan? It depends on the lender's policies. Some may offer deferrals for car loans on a case-by-case basis.
• Should I use a loan deferral as my first option? Consider it as a last resort after exploring other financial management options like budgeting or refinancing.