Consumer Credit – Personal Loans
A personal loan is used for providing credit to a client for personal or household use. Personal loans can be for debt consolidation, buying a new or used car, renovations, weddings, travel etc.
Personal loans typically have a loan term between 12 and 60 months. There may be an option to select between fixed or variable rate loans, and the interest rate offered can be based on factors such as the client’s credit score.
The responsible lending obligations apply to all consumer credit (including personal loans) as they are NCCP regulated, this means that you must:
make reasonable inquiries about the client’s requirements, objectives in relation to the credit product
make reasonable inquiries about the client’s financial situation; and
take reasonable steps to verify the client’s financial situation.
This also means that compliance documents must be provided and / or completed. The compliance documents competed depend on whether you are a mortgage broker, that also provides credit assistance for personal loans or an asset only broker:
Mortgage Broker | Asset Only Broker |
• Credit Guide • Statement of Credit Assistance (SOCA) | • Credit Guide • Preliminary Assessment • Credit Proposal Disclosure Document |
Personal loans can be unsecured or secured loans:
Unsecured – means the customer does not have to use an asset as security to get a loan. These loans will usually have a slightly higher interest rate for the unsecured risk.
Secured – allows the client to borrow at a lower rate than an unsecured loan by using an asset (usually a car) they currently own or the asset they are buying, as security.
Some Lenders on panel that offer consumer loans are:
Creating the SOCA Document
If you have established that the application is for consumer finance, then you will be selecting the BID Application and demonstrating the client’s needs and objectives and acting in the client’s best interests.
Selecting the Consumer Loan Objective
From within the SOCA document, select from the available Consumer Finance objectives and complete the SOCA as normal.
Consumer finance loans have different upfront/ongoing costs depending on the lender. Refer to the Lender for full terms and conditions. Within the Preferred Loan Features/Scenarios tab, you will need to enter in the consumer finance products manually.
Use the 
feature within the SOCA to complete the product comparisons.
Once your clients have signed the SOCA, manually submit your consumer finance loan application direct with the recommended Lender through their portal. Make a note in Infynity that the application has been submitted directly with the Lender.
Disclaimer: This information is current as at the time of each QRG publication. It is a general information guide only.