Is risk based personal loan pricing good for you?

The Australian Securities and Investment Commission has asked GE Money to change advertisements for risk based personal loans. Risk based pricing is an interest rate based on the risk profile of the individual borrower. Riskier borrowers may pay a higher rate while proven low risk borrowers can qualify for a lower rate.

ASIC deputy chairman Peter Kell said: “Price-based marketing fosters competition and can be beneficial to consumers,” ASIC deputy chairman Peter Kell said.

“However, promoters need to ensure that consumers are not misled about an advertised interest rate.”

Source: Mortgage Business