1.17 Flashcards
(15 cards)
What types of organizations in Australia offer personal loans?
Banks, credit unions, building societies, other financial institutions
Examples of banks include ANZ Banking Group, Commonwealth Bank of Australia, National Australia Bank, and Westpac Banking Corporation.
Which authority supervises lending organizations in Australia?
Australian Prudential Regulatory Authority (APRA)
What services must lending organizations provide to assist customers in choosing loan products?
Information, tips, tools, access to financial advisors, and counselling specialists
What is the difference between fixed and variable interest rates?
Fixed interest rates remain the same throughout the loan term; variable rates change over the loan period.
What can a borrower apply for if they experience difficulty with loan repayments?
Hardship variation
What are the steps a borrower must take to apply for a hardship variation?
Contact the loan provider, explain the hardship, and detail repayment capabilities.
List some options available for varying a loan due to hardship.
- Extending the loan period
- Making smaller repayments over a longer period
- Postponing repayments for an agreed period
True or False: Ignoring repayment problems is a recommended approach.
False
What can happen if a borrower continues to skip repayments?
The finance provider can foreclose on the loan.
What was Ajay’s initial loan amount and interest rate?
$10,000 at 10% fixed interest rate
What change did Ajay request for his loan after losing his job?
To extend the loan term from five to seven years and reduce the interest rate to 5%.
What is the role of independent financial advisors and counselors?
They provide support for negotiating loans and payment plans, and their services may incur a cost.
What free services can individuals access for financial advice?
Counselling services from government or community agencies, such as the National Debt Helpline.
Fill in the blank: People who prefer to ‘go-it-alone’ can access reliable information, factsheets, tips, and tools through _______.
moneysmart.gov.au
What is the best choice for someone applying for a hardship variation?
The option of ‘best fit’ that is no-cost or low-cost, not directly associated with their bank.
