AIB has recommended to its customers that if they find themselves facing financial difficulties during the current Coronavirus outbreak, they should contact their local branches or a mortgage arrears helpline, dedicated to supporting people during these difficult times.
Covid-19 is increasing concerns far and wide. Banking customers, mortgage payers and loan payers are currently concerned about how they can keep up with their repayments.
Lenders have announced that they are currently relaxing policies and adopting measures to cope with this crisis and allow some flexibility for their customers. Nevertheless, nothing is certain at present with no regulations supported by the state banks.
What customers can expect to happen to them will depend significantly on their status. Repayment holiday options have been announced but solely for mortgage customers. At present concerns are continuing to rise, for all borrowers.
And regarding the commercial customers, those who are approaching the banks asking for the repayments on their loans to be frozen for now are being informed that doing so would most likely affect their credit ratings in the future.
Bank of Ireland has announced its willingness to support its personal customers. They vouch to offer flexible arrangements, including loan breaks and anyone who wishes to take this offer should contact them to discuss it further.
If you are a Business customer with the bank of Ireland, they are also offering some flexibility with regards to loan repayments and also the opportunity to obtain some emergency working capital, if needed.
Bank of Ireland has stressed that they don’t intend to hurt a customer’s credit file with what they are currently offering. They have said that their plans are in place to support customers directly affected by Covid-19.
Unfortunately, other banks have yet to announce any definitive approach to the pandemic.
AIB has announced to its customers to promptly contact local branches, especially if this Corona crisis is likely to affect their current financial situation. By contacting their mortgage arrears helpline, they can get some support and advice on how to manage this situation. Measures they have posed include interest freezing for up to 6 months, interest-only repayments or credit availability for clients in desperate need of financial support.
For business clients, the bank has also announced its willingness to support, including a speedy 48hour loan application or overdrafts to the value of 60,000 euro plus the option to obtain a short-term cash advance.
What hasn’t been made crystal clear is how the following supportive measures are likely to affect a client’s credit file.
One of their spokespersons has agreed that customers shouldn’t have the ICB (Irish Credit Bureau) impacted due to the direct result of the Covid-19 crisis. Although, if some do find that they have suffered the consequences, then they have been advised that they will be supported.
Following this they also issued this statement, “We urge customers not to stop paying their direct debits on their repayments as this could impact their ICB score due to non-payment. Therefore, engagement with the bank at an early stage is crucial.”
Permanent TSB has offered similar advice to its customers with regards to the Covid-19 pandemic and its effect on its customers. They recently told the Irish Times that they are providing support to any of their customers who have been struck by the pandemic; however, each case will be dealt with individually.
Again, with regards to credit files and the direct impact, they have assured that they are considering all aspects and are actively supporting their customers but have yet to make any final decisions when it comes to their ICB impact.
Ulster Bank has announced its willingness to support its business customers by offering payment holidays as well as capital support for those who need it. With mortgage repayments, they vouch to provide a break of up to 3 months but have stressed that each customer will be dealt with individually.
Although banks are still not being fully clear on how this crisis is going to affect customer credit ratings (when people have been directly hit), the Central Bank made it clear that it’s more than anything down to the lenders how they handle the situation.
The chief executive of ISME, Neil McDonnell, believes that business customers who get offered a loan holiday are most likely going to struggle to see this crisis through, he doesn’t think it’ll be enough on its own.
“The likelihood is that this will prolong beyond the end of March, and liquidity solutions are going to have to be pretty aggressive. You’re looking at an event that will at least be as disruptive as 2008, 2009 and will impact the SME community.”
Regarding anyone who has been laid off work, they have been assured that they can obtain some financial support from the Government. On Monday, many people were forced to leave employment due to drastic measures to close down all non-essential workplaces, to help flatten the curb of the spread of the virus.
For those who have been laid on a temporary basis with no pay must apply to the Department of Employment Affairs and social protection where they will be able to access a public fund related to Covid-19 and unemployment.
Anyone who is employed or runs their own business and has been forced out of work due to the pandemic can obtain the available funds. This just requires filling out a short application form, and they can get a payment of 203 Euros for the next 6 weeks. These forms can be posted by mail or applied for online (but only providing applicants have a public service can they apply online.) Over 25s can apply for this, and anyone self-employed they will have their case addressed individually.
This payment is for workers, it’s classified as jobseekers’ allowance and is currently being paid over a period of 6 weeks. It’s to ensure that those left with no financial income at this present time, are getting some manageable income to survive off whilst isolating at home.
If you are currently still working but have had your hours cut due to the pandemic, you can get some financial assistance on a short-term basis. This payment will help to support the loss of hours during your working week. It’s been stated that workers can apply for two-fifths of their loss of earnings, but the budget is calculated at jobseekers’ rate, not wage rate. So, two days’ loss could offer a top-up 81.20 Euros to workers.
If you are self-isolating due to illness you can obtain some benefits and welfare allowance to support you, the rates are 305 Euros a week for a period of two weeks for anyone who has been medically advised to stay at home in isolation, following a diagnosis of Covid-19.
Payments can be made directly into anyone’s bank accounts following the BPFI engaging with the Department of Finance on behalf of the five main banks. This enables people to access funds without the need to visit a branch.