SYDNEY, Jan 20 (Reuters) - Australia on Monday boosted emergency grants and loans for small businesses hit by bushfires that have ravaged the country during the peak tourist season, as firefighters used cooler weather to prepare for a return of hazardous fire conditions.

The fires have killed 29 people and millions of animals, destroyed more than 2,500 homes and razed an area roughly a third the size of Germany since September.

Several days of rain and a dip in temperature have reduced the number of active fires across the country's densely populated southeast and given authorities an opportunity to focus on the recovery effort.

The federal government said it would increase grants for small businesses affected by the fires to A$50,000 ($34,400) each, from A$15,000 announced earlier, and offer loans up to A$500,000, interest-free for two years.

"The customers come back and the businesses rebuild and the local towns and communities rebuild with their support," Prime Minister Scott Morrison told television network Nine Entertainment Co Holdings Ltd.

"My priority is to get the support into the communities where it's needed."

The Australian tourism industry estimates the fires which have raged throughout the December-January holiday season have cost it almost A$1 billion.

The Bureau of Meteorology on Monday issued a severe thunderstorm warning for large parts of New South Wales state including bushfire-affected coastal towns.

"Severe thunderstorms are likely to produce damaging winds, large hailstones and heavy rainfall that may lead to flash flooding in the warning area over the next several hours," the bureau said in a statement.

Firefighters had taken advantage of the milder conditions to "slow the spread of fire and build containment lines ahead of increased fire dangers", the New South Wales Rural Fire Service said in a post on its Twitter account.

Hot and windy conditions would likely return to many parts of NSW later in the week, it added.

The Australian Open tennis tournament was scheduled to begin in Melbourne on Monday with organisers saying they would monitor air quality after a player collapsed on court and quit a qualifying match due to bushfire smoke inhalation.

Here are key events in the bushfire crisis:

*Early on Monday, 80 fires were burning across New South Wales, none above the lowest warning level, and there were 33 emergency warnings in Victoria, including one flood warning.

*Thunderstorms are forecast for NSW and Victoria states, including possible hail, according to weather forecasters.