What is Financial Hardship?

Financial hardship occurs when a person has difficulty paying loan repayments and cannot pay on time. It usually happens for one of two reasons: a change of circumstances occurred after you received a loan you could originally afford, or you could not afford to repay the loan when you first obtained it.

If you face a sudden change in circumstances and cannot meet your financial commitments — bills and loans included — contact your lender as soon as possible to discuss next steps. You have certain rights if your loan is covered by credit law. If you couldn’t afford the loan from the start, seek legal financial advice immediately.

Applying for financial hardship

You can apply for financial hardship with your lender if you’re facing a sudden change in circumstances. A few things worth considering: be as sensible and reasonable as possible with your request, know what you can and cannot afford, and — most importantly — do not commit to any repayments you cannot afford.