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Vehicle Finance: How to Be a Responsible Borrower

Advice on how to borrow responsibly and find a responsible lender when you need a car loan.

Posted on: February 01, 2016

Vehicle Finance

No matter how desperately you need a car loan, it’s always in your best interests to borrow responsibly. Payday lenders may offer you quick cash but their product isn’t suitable for financing a motor vehicle.

If you want to avoid mounting debt and source the best car finance help out there, make sure you place your trust in a licensed, motor finance specialist lender.

What Exactly Is A Responsible Lender?

Lenders in Australia have obligations under the National Consumer Credit Protection Act. This Act requires us to follow certain steps to ensure that the finance offered to you is suitable.

These steps are as follows:

  1. We have to understand the type of loan you want to make sure it suits your needs.
  2. We have to make inquiries about your financial situation to ascertain whether you can meet your repayments. If you’re applying for a hefty car loan, be prepared for a more thorough background check.
  3. As part of our inquiries, we have to verify your financial situation in a reasonable manner. From this we’ll determine if you can meet your financial obligations and repay the car loan on our terms. If we foresee the car loan causing you “substantial hardship”, we will deem the loan unsuitable – a decision that ultimately protects you.

If you are a borrower who has experienced a car loan rejection or is unable to receive the total amount you applied for, don’t take it personally. Understand that this measure is in place to protect you as well as the lender, and in the grand scheme of things, taking out a loan in circumstances where making the repayment will put you under too much financial pressure will only make your financial situation worse.

In the end, the responsible lending obligations are there to protect all parties involved in the transaction. At Finance One, we’ll work with you under these rules to make sure you get the vehicle financing you need.

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Contact our friendly loan support team here!



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