Have you noticed how loan application forms are asking for more and more information? How employment, income, credit card, liabilities and assets need to be more fully disclosed? And how much paperwork such as payslips, tax returns, tax assessments, BAS Statements, bank statements, rent and loan statements is required?
The reason is that the regulatory authorities - in Australia being ASIC, are requiring lenders and loan brokers to comply with more rigorous responsible lending practices when assessing loan applications.
Lenders and loan brokers are responding with more detailed loan application forms, more supporting documentation, and more follow up. This is a summary of the legal requirements under the National Credit Act:
- The lender must make reasonable inquiries about a customer's requirements and objectives
- The lender must make reasonable inquiries about a customer's financial situation
- The lender must take reasonable steps to verify the customer's financial situation
- The lender must make a preliminary assessment
- The lender must provide a credit guide
To find out more,