Government crackdown on loan sharks
Payday lenders who loan money to people for a short period of time (usually less than 62 days) may be forced to close under a crackdown by the State Government. Payday lenders charge interest rates of up to 1,300 per cent for loans as small as $200. However, the Government will attempt to close the legal loophole that allows payday lenders to charge high interest rates. Payday lenders will have to comply with the Credit Code that limits the amount of interest charged to a maximum of 48 per cent. Under the code, lenders will be required to fully disclose the contract terms and give 30 days notice before repossessing any loan security.
Find out more about payday lenders, read our article Beware the Loan Sharks of the 21st Century.