Loans and credit

Things to think about

There are things you need to think about when taking out a loan or using credit. You should ask:

• Is this something you need right now or can you save up and pay for it in full later?
• Will repayments make your budgeting tight or make it hard to cover bills like rent or food?
• Will the repayments stop you from saving or having money for emergencies?
• Are there other ways to get or pay for what you want?

There’s finance that is safe and affordable. Check if you can get a no interest loan from Good Shepherd.

Before applying for a loan or credit, use the simple money manager. It can help you work out your budget. We also have the rent vs buy calculator that can help you to find out the costs of renting or buying household items.

If you do apply for a loan or credit, always check the terms and conditions. There will be things lenders won’t tell you up front. Don’t sign a contract if you still have questions.

Think about talking to a professional, like a financial counsellor, before you take out a loan or credit. You can also find out about free legal advice on the Moneysmart website.

Types of loans and credit

There are many types of loans and credit with different fees, charges and interest rates.

Visit the Moneysmart website for advice about:

• pay day loans that can have high fees and charges
• how credit cards work and how to manage them
• debt agreements, as they may stop you from borrowing in the future
• rent to buy or consumer leases, use our calculator to compare rent vs buying costs
• how buy now, pay later services work
• what to consider when consolidating loans
• the impact of bankruptcy on future borrowing and jobs
• what to do when you experience loan rejection on a loan or credit application.

No interest loans

No interest loans can be used for the purchase of essential goods and services. A no interest loan has 0% interest and no fees or charges ever. You can use them to help cover unexpected costs and pay the money back at a rate that’s manageable for you. Some of the essential goods and services you can use a no interest loan for include:

• household items like appliances, white goods and furniture
• car repairs and registration
• medical, dental, well-being and life event expenses
• bond and rent in advance for a new rental property with a registered agent
• rates
• costs associated with a natural disaster.

Find out more about no interest loans and a full list of what you can use them for on the Good Shepherd website.

Licensed lenders

If you get a loan or credit, it’s a good idea to protect yourself. This may mean taking the time to choose the right loan or lender.

There are laws that licensed lenders must follow when lending money to you. Find out more about consumer credit laws on the ASIC website.

To check for a licensed credit provider or credit assistance provider, search the ASIC Connect Professional Registers on the ASIC website.

If you’re unhappy with a lender, find out how to make a complaint on the Moneysmart website.

Loan scams

Be cautious if you get a phone call or an email from a salesperson offering you a loan or credit. It could be a loan scam. Don’t give them any personal information over the phone or click any links in emails or text messages you think are suspicious.

Protect yourself by doing some research before you agree to anything. A scam can appear as a great deal but will cost you a lot of money if you’re not careful.

Find out about loan scams on the Moneysmart website.

Protecting you from scams is important to us. Find out about how to identify scams and getting help with a scam or reporting one.

Other help

Find out more information on managing your money.

You can talk to one of our Financial Information Service (FIS) Officers for free. Our FIS Officers can share tools, resources and information that can help you make more informed financial decisions.

If you’re having trouble paying a bill, loan or mortgage, speak to your bank or service provider. Most will have a hardship team who can help. They may be able to delay, reduce or waive debt repayments depending on your situation.

The Moneysmart website has advice about trouble with debt. It can help you manage some debt issues, like credit cards or bills. They also have information to help you identify and avoid financial scams.

It’s worth getting free expert advice to get a clear picture of your finances. For help in your area find a financial counsellor on the National Debt Helpline website.

If you’re a farmer or small rural business, you can speak to a rural financial counsellor. Read about the Rural Financial Counselling Service on the Department of Agriculture, Fisheries and Forestry website.