There are many different types of consumer loans such are secured, unsecured, lines of credit, home loans, etc. However, our Members predominately provide two key types of personal loans called SACC’s and MACC’s.
What is a SACC loan?
A SACC loan is a government regulated product under the National Consumer Credit Protection Act (2009). A SACC loan is a Small Amount Credit Contract which varies in length from 16 days to 1 year, up to $2,000.
They are designed to help meet unexpected expenses and are a convenient and economical way to manage a temporary cash flow problem such as an unexpected car repair bill, car registration, school fees, utility bill, etc. It is important to remember that these loans are only for short term emergencies and are not suited for long-term or continuing financial needs.
Government regulation requires that your loan provider must carry out “responsible lending obligations” to ensure that you can afford the loan you are asking for. Reputable lenders such as Members of the National Credit Providers Association will not lend to you without first confirming you have sufficient disposable income to service your loan amount over a time-frame that meets your needs. Different lenders have different ways of carrying out these checks when you apply for a loan.
All SACC loans are unsecured which means that you don’t have to pledge any asset that you own such as a vehicle to take out the loan.
If you are experiencing problems in meeting your loan commitments, your loan provider will most likely agree to a change in your loan repayments under its financial-hardship responsibility to you. It is best to contact your loan provider as soon as you start experiencing problems to ensure you don”t incur any other charges such as late payment fees. If you have ongoing problems meeting your financial needs or debt obligations, you should first talk to your loan provider. Remember, a SACC loan should be seen as a “one off” loan for an emergency and should not be used continuously as a source of credit. If you cannot agree with your lender about how to deal with yoru financial difficulties then follow the process set out in this link regarding‘Resolving Disputes”.
What is a MACC loan?
A MACC loan is also a government regulated product under the National Consumer Credit Protection Act (2009). A MACC loan is a Medium Amount Credit Contract. MACC loans vary in length from 16 days to 2 years and can be from $2,001 to $5,000.
These loans are generally used to meet larger expenses such as replacing whitegoods, car purchase, rental bonds, dental expenses, unexpected travel, etc.
Your MACC loan provider must carry out their “responsible lending obligations” to ensure that you can afford the loan and the repayment timeframe. Reputable lenders such as Members of the National Credit Providers Association will not lend to you without first confirming you have sufficient disposable income to service a MACC loan. Different loan providers may have different ways of assessing your ability to repay the loan you are applying for.
Some customers prefer to use a MACC loan rather than a bank credit card or a personal loan for a similar amount through a bank or building society. With any type of credit, it is important to remember that there are fees and charges attached to the product and this may make the product more suitable for an emergency.
MACC loans can be secured or unsecured:
“Unsecured” means that you don’t have to pledge an asset as security to take out the loan.
“Secured” means that you have to pledge an asset that you own, such as a vehicle, to take out the loan. If you fail to pay the loan out, the lender is entitled, by law, to repossess your asset as payment towards the unpaid loan amount. If the sale of your loan security does not payout the loan, you are liable for the shortfall. As long as you pay out your loan completely as per the terms of the loan contract then there is no problem with a secured loan. By law, lenders cannot take security over home assets such as beds and essential whitegoods such as a fridge or washing machine.
If you have taken out a MACC loan and are experiencing financial problems in meeting your loan commitments, your loan provider will most likely agree to a change in your loan repayments schedule or amount under its financial-hardship responsibility to you. This is the case whether your MACC loan is secured or unsecured. It is best to contact your loan provider as soon as you start experiencing problems to ensure you don’t incur any other charges such as late payment fees.
If you have ongoing problems meeting your financial needs or debt obligations, you should first talk to your loan provider and if you are still unhappy with the outcome then follow the process set out in this link regarding “Resolving Disputes”.