Big changes ahead for small personal loans

The payday lending and consumer leasing industries faces an overhaul if the Government accepts the recommendations of the Review of Small Amount Credit Contract Laws.

The review recommends an extension of the protected earnings amount rule for small loans up to $2000 where the term is less than 12 months. Repayments would not be allowed to exceed ten per cent of income.

The Australian Securities and Investments Commission said compliance with responsible lending obligations among payday lenders was low and called for the rules to be simpler and clearer.
There are hundreds of reputable lenders providing good value personal loans on Don’t get caught in a debt spiral by expensive payday loans from lenders who don’t comply with responsible lending laws.

Source: Banking Day