Loan on Hold? Here's How to Regain Control (2026)

Life can be unpredictable, and sometimes financial obligations, like loan repayments, can become overwhelming. If you're facing a temporary financial setback, you might be wondering if you can put your loan on hold. Understanding your options can provide relief and help you manage your finances more effectively.

Understanding Loan Holds

A loan hold, often referred to as a 'loan repayment holiday' or 'deferment,' allows borrowers to temporarily pause their loan repayments. This can be a lifesaver during times of financial hardship, such as job loss, illness, or unexpected expenses. However, not all loans are eligible for a hold, and the terms can vary significantly between lenders.

Current Rates, Requirements, and Options

As of 2026, the Australian financial market offers a range of options for borrowers seeking a loan hold. Interest rates for personal loans typically range from 6.49% to 12%, depending on the lender and the borrower's credit profile. Mortgage rates are slightly lower, with an average range of 5% to 6.5%.

Generally, to be eligible for a loan hold, you must demonstrate genuine financial hardship. Lenders may require documentation such as bank statements, a letter from your employer, or medical certificates. It's crucial to understand that while payments may be paused, interest will often continue to accrue, potentially increasing the total amount payable over the life of the loan.

Loan Type	Interest Rate	Eligibility
Personal Loan	6.49% - 12%	Proof of hardship
Home Loan	5% - 6.5%	Proof of hardship
Car Loan	7% - 10%	Proof of hardship

Steps to Request a Loan Hold

Here’s a step-by-step guide to help you navigate the process of requesting a loan hold:

1. Review Your Loan Agreement: Before reaching out to your lender, understand the terms and conditions of your loan. Check for any clauses related to deferment or hardship options.
2. Gather Documentation: Collect all necessary documentation that supports your claim of financial hardship. This may include recent pay slips, medical reports, or bank statements.
3. Contact Your Lender: Reach out to your lender directly. Explain your situation clearly and inquire about the options available for putting your loan on hold.
4. Submit a Formal Request: If your lender offers a loan hold option, you may need to fill out a formal application or request form. Ensure all required documents are attached.
5. Confirm the Terms: If approved, confirm the terms of the loan hold, including how long the hold will last and any additional costs or interest that may accrue.
6. Stay Informed: Keep communication open with your lender throughout the hold period and update them if your financial situation changes.

Tips and Considerations

Here are some expert tips to keep in mind if you're considering putting your loan on hold:

• Consider Alternatives: Before opting for a loan hold, explore other options such as refinancing or negotiating a lower interest rate.
• Understand the Long-Term Impact: Pausing your loan repayments can extend the loan term and increase the total interest paid. Weigh the short-term relief against long-term costs.
• Communicate Proactively: Keeping open lines of communication with your lender can facilitate a smoother process and potentially more favourable terms.
• Seek Professional Advice: Consulting with a financial advisor or a mortgage broker like Esteb and Co, who have access to over 83 lenders, can provide valuable insights tailored to your unique situation.

Frequently Asked Questions

1. Can all loans be put on hold?
Not all loans are eligible for a hold. It largely depends on your lender's policies and your specific loan agreement.

2. Will interest accrue during a loan hold?
Yes, interest generally continues to accrue, which can increase the total repayment amount.

3. How long can I put my loan on hold?
The duration varies by lender, but loan holds typically range from a few months to a year.

4. What if my lender doesn't offer a loan hold?
If a loan hold isn't an option, consider discussing other forms of financial assistance or restructuring with your lender.

5. Will a loan hold affect my credit score?
Generally, a loan hold itself does not affect your credit score, but missed payments prior to the hold could have an impact.

6. Can I pay interest-only during the hold period?
Some lenders may offer interest-only payments as an alternative to a full hold, allowing you to manage costs while maintaining your credit standing.

7. How do I know if I'm eligible for a loan hold?
Eligibility is typically determined by demonstrating financial hardship. Contact your lender to understand their specific requirements.