What is Responsible Lending?
Responsible lending means only recommending or helping a customer apply for a loan that suits their needs and financial situation. You must not suggest or assist with a loan that is unsuitable.
Your key responsibilities
As a broker, you must:
Ask the right questions
Find out the customer’s financial situation (income, expenses, debts).
Understand their goals (e.g. buying a home, consolidating debt).
Verify the information provided to you
Verify income and expenses using documents like payslips, bank statements, etc.
Assess suitability
Make sure the loan is not unsuitable for the customer.
Think about whether they can afford repayments without hardship.
Provide documentation
If asked, give the customer a copy of your preliminary assessment.
What makes a loan Unsuitable?
A loan is unsuitable if:
The customer can’t afford the repayments.
The loan doesn’t meet their needs or goals.
It puts them in financial hardship.
What record should you keep?
Keep records of:
Your inquiries and what the customer told you.
How you verified their financial situation.
Your assessment of whether the loan is suitable.
Where can I find further information?
The Responsible Lending Policy uploaded to Infynity provide a detailed overview of Responsible Lending.
Why does it matter?
Following responsible lending rules helps:
Protect customers from financial harm.
Protect you from legal and compliance risks.
Build trust with lenders and regulators