Responsible lending

What responsible lending means

We must not suggest a credit contract to you, or help you apply for one, if it is unsuitable. A contract is unsuitable if it does not meet your requirements and objectives, or if you could only meet the repayments with substantial hardship.

So before we help with consumer credit, we make reasonable inquiries about what you need and your financial situation, take reasonable steps to verify it, and make a preliminary assessment that the contract is not unsuitable.

What we check, and how

We verify what you tell us rather than rely on it. With your consent, we check:

• Your identity.
• Your income, expenses and existing debts, usually from your bank statements or bank account data.
• Payslips, or for a business your financials or tax returns, where they are needed to confirm your income.
• Your credit file, from a credit reporting body, with your separate consent.
• Your household, dependants and any changes you expect, such as parental leave or retirement.

What we look for

Every application is assessed on its own facts. Among other things, we and the lender look at whether:

• You can afford the repayments, alongside your living expenses and other commitments.
• You are already over-committed, or behind on other debts.
• Your spending shows signs of financial difficulty, such as dishonoured payments or heavy gambling.
• The loan, its term and any balloon or residual fit what you told us you want.

If something doesn’t fit, we tell you, and show what would change the result. We don’t keep shopping your application around.

Business finance

Finance for a vehicle used mainly for a business is not consumer credit, and you will be asked to declare the business purpose. We still check the business and the borrower, and we won’t help with finance we think you can’t afford.

If you are in financial difficulty

Please think carefully before taking on new credit. If you are struggling with repayments, contact your lender early: they must consider a hardship request. You can also talk to a free, confidential financial counsellor through the National Debt Helpline on 1800 007 007 or at ndh.org.au.

More information

Our Credit Guide explains our licence, how we are paid and how to make a complaint. You can ask us for a copy of our preliminary assessment within seven years of the date of the contract.