Top 10 Loan Questions and Their Answers

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?

You should be careful enough to presume that the dealer has trust about your son for repayment of the loan. Under the Consumer Credit Code you must get a copy of the credit agreement. Take these papers to an expert consultant (e.g. competent lawyer). Keep in mind that you have to repay the amount of the loan (sometimes all amounts payable under the contract) if the borrower fails to pay the loan. Extra charges are also possible.

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

This is a national system of law that is applicable in every State. It is not a code of conduct but it is a law that is imposed in some situations where credit is obtainable. Any non business credit dealings are controlled by the Code. The providers such as banks, building societies, credit unions, finance companies and commerce inform you about your justifications and bindings in any credit agreement, including interest rates, fees, and the percentage paid to the agent.

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?

It is a personal loan as your uncle’s business is not to provide credit. Hence your opinion is not valid.

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

In that specific situation it is not considered under the Consumer Credit Code.

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

In some situations the Consumer Credit Code permits a guarantor to discontinue the contract as guarantor. This can happen before the credit has been supplied, or if there is a significant disparity between the agreement and pre-contract statements or the proposed contract. Get lawful advice.

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

It can be modified if there is a provision in agreement. It would be useful to get advice of an expert to decide if the change is applicable.

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 be at liberty to take this action because you were fraudulent. Get legal advice soon.

8. I bought a car on credit, regulated by the Consumer Credit Code. I lost my job and cant keep up the payments. Should I do anything before they repossess?

Retrieval can occur under the Consumer Credit Code after the end of the suitable notice period. It would be a fine suggestion to get the car valued, and to take photos/video to prove its condition. This is because the credit supplier will make a decision 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 free advice from a Consumer Credit Legal Service. It is possible to get a contract declared unjust by a court if there was an unfair bargaining influence at the time of agreement.

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

Very minutely! If it is not suitably explained or you do not comprehend it, you are advised to get a competent advice. It is better to be safe than to be regretful.