Top 10 Loans

Going guarantor, not sure about obligations, don't know where to start? Try our loans and credit top ten questions.

1.    My son wants me to go guarantor for his car loan. I am struggling financially, but he assured me that the dealer would not offer the loan if he believed my son would not be able to repay the loan?

Be very careful! You should not at all assume that the dealer necessarily believes your son can repay the loan. Under the Consumer Credit Code you must have a copy of the credit contract. Take these documents to a professional adviser (e.g. qualified lawyer).

2.    What is the Consumer Credit Code and how does it protect me?

This is a national code that is applicable in each State. Despite what its title suggests, it is not a code of conduct but legislation that is enforceable in certain situations where credit is offered. Any non-business credit transactions are governed by the Code. Credit providers such as banks, building societies, credit unions, finance companies and businesses, have to tell you what your rights and obligations are in any credit arrangement, including interest rates, fees, and commissions.

3.    My uncle loaned me money to be repaid over five years. Since he is charging me interest, I assume it is covered by the Consumer Credit Code?

No, it is not, because your uncle's business is not to provide credit – it is a personal loan.

4.    My bank account went into debit – is that credit under the Consumer Credit Code?

No, that sort of situation is specifically excluded under the Consumer Credit Code.

5.    Can I pull out of my obligation to be a guarantor?

In some circumstances the Consumer Credit Code allows a guarantor to withdraw from the contract as guarantor. This can take place before the credit has been provided, or if there is a material difference between the contract and pre-contract statements or the offered contract. Get legal advice.

6.    Can the interest rate in my credit contract be changed?

It can be changed if the contract allows for it. It would be worth getting professional advice to determine if the change is valid.

7.    We were not really honest in our credit application, and the credit company found this out, but they have not given us the notice under the Consumer Credit Code to repay the loan. Is that right?

They may in fact be entitled to take this action because you were fraudulent. Get legal advice immediately.

8.    I bought a car on credit, regulated by the Consumer Credit Code. I lost my job and can't keep up the payments. Should I do anything before they repossess?

Repossession can take place under the Consumer Credit Code following the expiry of the appropriate notice period. It would be a good idea to get the car valued, and to take photos/video to document its condition. This is because the credit provider will make a determination of the value of the car following repossession.

9.    My son entered into a contract regulated by the Consumer Credit Code, but I think he was conned into it and had little idea of what was going on. What can he do?

He should get legal advice – in some States he may be able to get free advice from a Consumer Credit Legal Service. It is sometimes possible to get a contract declared unjust by a court if there was an unequal bargaining power at the time it was entered into.

10. How carefully should I read the credit contract before I sign it?

VERY CAREFULLY! If you don't understand it, or it is not properly explained, get professional advice. Better safe than sorry.

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