Your Rights as a Borrower in Australia: A Consumer Guide

Borrowing money can feel complicated, especially when you are presented with unfamiliar fees, repayment conditions and legal terminology.

However, Australian consumers have important protections when dealing with many lenders and credit providers. These protections are intended to help you understand what you are agreeing to, receive fair treatment and ask for assistance when repayments become difficult.

In this guide, we explain your main rights as a borrower in Australia, the responsibilities you still have and the steps you can take when something goes wrong.

What Rights Do Borrowers Have in Australia?

Your exact rights depend on the type of credit, the provider and whether the arrangement is covered by Australian consumer credit laws.

For regulated consumer credit, your rights may include:

• Receiving clear information about the credit contract.

• Being told about relevant interest, fees and repayment obligations.

• Having your financial circumstances assessed where responsible lending laws apply.

• Requesting financial hardship assistance.

• Disputing incorrect information.

• Complaining to the provider.

• Taking an unresolved complaint to an external dispute resolution service.

• Receiving fair and lawful treatment during debt collection.

Credit licensees covered by responsible lending obligations must not enter into, suggest or assist with a credit contract that is unsuitable for the consumer.

Not every financial arrangement is regulated in exactly the same way. We encourage you to check the provider’s contract, credit guide, terms and conditions, and complaints information before proceeding.

1. You Have the Right to Understand the Credit Arrangement

Before agreeing to regulated consumer credit, you should receive enough information to understand the arrangement and its costs.

Depending on the product and the laws that apply, this may include:

• The amount of credit.

• The interest rate.

• Establishment, account or transaction fees.

• Repayment amounts and dates.

• The total term of the contract.

• Default fees or consequences.

• Circumstances in which fees or terms may change.

• Your right to make a complaint.

• Information about the provider’s dispute resolution process.

ASIC also provides prescribed information statements explaining some of the rights and obligations of debtors and credit providers under regulated credit contracts.

Read the Full Cost, Not Just the Headline Rate

An advertised interest rate does not always represent the entire cost of borrowing. Fees, charges and the repayment period may also affect the amount you pay.

Where a comparison rate is provided, it generally combines the interest rate with most fees and charges based on a prescribed example. However, it may not include every possible cost, such as certain late-payment or government charges.

Before agreeing to credit, ask:

• How much will I receive?

• How much will I repay in total?

• When are the repayments due?

• What happens if I pay late?

• Can I repay early?

• Are any fees refundable?

• Could the repayment leave me unable to cover essential expenses?

We recommend reading the contract rather than relying only on advertising. Keep a copy of the agreement and any related documents for your records.

2. You Have Responsible Lending Protections for Regulated Credit

Responsible lending rules apply to many providers of consumer credit regulated under the National Consumer Credit Protection Act 2009.

The central rule is that a credit licensee must not enter into or assist with an unsuitable credit contract.

Depending on the product and your circumstances, a provider may need to make reasonable enquiries about matters such as:

• Your income.

• Your regular expenses.

• Your existing debts.

• Your wider financial situation.

• Your borrowing requirements and objectives.

• Whether you could meet the repayments without substantial hardship.

The provider may also need to take reasonable steps to verify relevant financial information.

A contract may be unsuitable when the consumer is unlikely to meet the financial obligations without substantial hardship or when the product does not meet their requirements or objectives.

Responsible Lending Does Not Mean Guaranteed Approval

Responsible lending protections do not give you an automatic right to receive credit.

A provider may decline your application even when you meet its basic eligibility requirements. Each provider may have its own assessment criteria, and regulated providers must consider whether the product is appropriate or suitable under the rules that apply to them.

You are also responsible for providing complete and accurate information. Hiding expenses, overstating income or providing misleading information may lead to an inaccurate assessment and could breach the application terms or the law.

3. You Have the Right to Know Who You Are Dealing With

Before borrowing, identify the legal entity providing the credit or financial service.

For regulated credit, you can use ASIC’s professional registers to check whether a lender or broker holds an Australian Credit Licence or acts as an authorised credit representative. ASIC’s registers allow you to search by a company’s or individual’s name, licence number, ACN or ABN.

Look for:

• The company’s legal name.

• Its Australian Credit Licence details, where applicable.

• Clear contact information.

• A credit guide or relevant product document.

• Its internal complaints process.

• Membership of the Australian Financial Complaints Authority, where applicable.

• Clear terms and conditions.

Be cautious when a provider does not clearly identify itself, asks for unusual upfront payments or pressures you to act immediately.

4. You May Have the Right to Request Financial Hardship Assistance

A change in circumstances can make repayments difficult. Job loss, reduced working hours, illness, injury, relationship breakdown or an unexpected expense may affect your ability to meet a credit commitment.

Under section 72 of the National Credit Code, a debtor may notify a credit provider verbally or in writing that they are or will be unable to meet their obligations under a regulated credit contract.

A hardship arrangement may involve:

• Temporarily reducing repayments.

• Delaying one or more payments.

• Extending the repayment period.

• Changing the repayment schedule.

• Arranging another manageable solution.

The options available will depend on the contract, the provider and your circumstances.

How to Ask for Hardship Assistance

Contact the provider as soon as you believe a repayment may be difficult.

Explain:

• What has changed.

• When the difficulty began.

• How long you expect it to continue.

• What repayments you can realistically afford.

• What type of arrangement you are requesting.

Keep copies of emails, letters, account messages and any supporting documents.

Do not agree to an amount you are unlikely to maintain. A realistic arrangement is usually more useful than making a promise that creates further difficulty.

A lender must consider a request for financial hardship assistance and must provide reasons if it refuses the request. You can complain if you are unhappy with the decision or the way your request was handled.

5. You Have Rights When Dealing With Debt Collectors

Missing a repayment does not remove your right to be treated fairly.

Debt collectors must follow laws and regulatory guidance governing how and when they contact you. They must not use physical force, harassment, coercion, misleading conduct or unreasonable pressure.

A debt collector should also take reasonable care to ensure that:

• The debt belongs to you.

• The amount is correct.

• The person contacting you has authority to collect it.

• Your personal information is not improperly disclosed.

• Contact is not excessive or intimidating.

Australian debt collectors are subject to restrictions on contact times and frequency. They must not discuss your debt with another person without permission or contact you more often than is reasonably necessary.

If you dispute a debt, ask for written details showing:

• The original creditor.

• The relevant account or contract.

• The amount claimed.

• Any interest or fees added.

• The collector’s authority to recover the debt.

If you are experiencing financial hardship, you can tell the collector and propose an affordable payment plan. We recommend offering only an amount you can realistically maintain.

Keep records of every contact, including dates, times, names and what was discussed.

6. You Can Access and Correct Your Credit Information

Your credit report may contain information about credit applications, accounts, repayment history, defaults and other relevant events.

You have the right to request a free copy of your consumer credit report from each credit reporting body once every three months. Different reporting bodies may hold different information, so it may be helpful to check each of them.

Review your credit report for:

• Accounts that are not yours.

• Duplicated listings.

• Incorrect repayment information.

• Debts that have already been paid.

• Outdated information.

• Signs of identity theft.

You can ask the relevant credit provider or credit reporting body to investigate and correct inaccurate, incomplete, outdated, irrelevant or misleading information.

Be cautious of businesses charging significant fees while claiming they can remove accurate negative information. Accurate information generally cannot be deleted simply because it is inconvenient.

7. You Have the Right to Make a Complaint

When you believe a lender or financial provider has made an error or treated you unfairly, begin with its internal dispute resolution process.

Your complaint may relate to:

• Incorrect fees or repayments.

• Unclear or misleading information.

• An unaffordable or unsuitable credit arrangement.

• The handling of a hardship request.

• Debt collection conduct.

• An incorrect default listing.

• Unauthorised transactions.

• Poor customer service.

• A failure to follow the contract.

How to Prepare a Clear Complaint

Include:

• Your name and account details.

• A brief description of what happened.

• Relevant dates and amounts.

• Copies of supporting documents.

• The steps you have already taken.

• The outcome you are seeking.

Possible outcomes could include correcting an account, refunding an incorrectly charged fee, reviewing a hardship decision or correcting credit report information.

Keep your complaint factual and focused. Save copies of everything you send and record when you contacted the provider.

8. You May Be Able to Complain to AFCA

If the provider does not resolve your complaint, you may be able to take it to the Australian Financial Complaints Authority.

AFCA provides a free, fair and independent dispute resolution service for consumers and eligible small businesses with complaints about financial firms. You should usually raise the issue with the financial firm first.

AFCA may consider complaints involving:

• Financial hardship.

• Responsible lending.

• Incorrectly applied or calculated fees and charges.

• Misleading or incorrect product information.

• Credit reporting.

• Debt collection.

• Disputed or unauthorised transactions.

• Privacy and confidentiality.

• Certain contract or loan management decisions.

AFCA can consider some complaints involving a declined or mishandled hardship request, as well as complaints alleging irresponsible lending. However, eligibility requirements, exclusions, monetary limits and time limits may apply.

Avoid delaying if you believe an issue remains unresolved.

9. Your Privacy and Personal Information Must Be Handled Appropriately

Credit applications often involve sensitive information, including identification documents, income details and bank account transaction data.

Australian privacy laws and applicable credit reporting rules regulate how many organisations collect, use, store and disclose personal information.

Before providing information, read the provider’s privacy policy and check:

• What information is being collected.

• Why the information is needed.

• Whether it may be shared.

• How long it may be retained.

• Whether overseas service providers are involved.

• How you can request access or correction.

• How to complain about a privacy concern.

Use the provider’s official website or app. Avoid sending identification or banking details through unverified email addresses, social media accounts or links in unexpected text messages.

When you deal with us, our Privacy Policy explains the information we may collect, how we use and protect it, and how you can request access or correction. It also explains how you can raise a privacy complaint with us.

10. You Have the Right to Consider Other Options

Being eligible for credit does not necessarily mean borrowing is the right decision for your circumstances.

Before agreeing to a loan, wage advance or another credit product, consider whether you could:

• Use available savings.

• Request a bill extension or payment plan.

• Ask a service provider about hardship assistance.

• Delay a non-essential purchase.

• Adjust your household budget.

• Compare lower-cost forms of credit.

• Seek free financial counselling.

A credit product may help with a short-term need, but it also creates a repayment obligation and reduces the income available to you later.

We encourage you to borrow only what you reasonably need and check that the repayments will still leave enough for housing, food, utilities, transport and other essential commitments.

Your Responsibilities as a Borrower

Consumer protections work alongside your own responsibilities.

You should:

• Provide accurate application information.

• Read the contract before accepting it.

• Understand the fees and repayment schedule.

• Keep your contact and payment details current.

• Monitor your account.

• Contact the provider early when your circumstances change.

• Avoid borrowing more than you can reasonably repay.

• Keep copies of agreements and correspondence.

Ignoring repayment problems may increase fees, collection activity and stress. Early communication will generally give you more opportunity to discuss the options available.

How Your Borrower Rights Relate to MyPayNow

We provide eligible working Australian residents with access to a portion of their wages before payday through a wage advance.

Eligible customers may be able to access up to 25% of their net pay, subject to a maximum advance of $2,000 and our eligibility, affordability and suitability assessments.

Our current charges are:

• A fixed credit charge equal to 5% of the amount advanced.

• Interest at 24% per annum on the outstanding balance.

• Interest capped at 62 days.

For example, if you take a $100 advance and repay it after seven days, the current cost example is:

This example assumes the advance remains outstanding for seven days. Your actual interest will depend on the amount you advance and how long the balance remains outstanding.

When assessing an application, we consider relevant information such as your income and spending patterns, account history and repayment history. This helps us assess eligibility, affordability and suitability.

We do not make a credit enquiry on your file with a credit reporting agency as part of our current process. However, this does not mean there is no assessment. You must still meet our eligibility criteria and provide the information needed for us to assess your application.

Repayment is generally scheduled by direct debit on your nominated repayment date. Depending on your circumstances and the options available in the app, you may be able to split or delay a repayment.

Before deciding whether a wage advance may be suitable for you, review our current FAQs, Target Market Determination, eligibility requirements, costs and repayment information.

Our product is designed for short-term use by customers who can afford the repayment without financial hardship. It is not designed for customers who are already experiencing financial hardship or need long-term credit.

Where to Get Free Support

When repayments, debts or essential expenses become difficult to manage, free help is available.

The National Debt Helpline provides free and confidential financial counselling on 1800 007 007. Financial counsellors are independent, do not sell credit products and work in the consumer’s interests.

A financial counsellor may be able to help you:

• Understand your options.

• Prepare a realistic budget.

• Communicate with creditors.

• Request hardship assistance.

• Deal with debt collectors.

• Consider whether an AFCA complaint may be appropriate.

Moneysmart also provides information about hardship assistance and services that may help with food, housing, bills and other urgent expenses.

Frequently Asked Questions About Borrower Rights in Australia

Can a Lender Approve a Loan Without Checking Whether I Can Afford It?

For credit covered by responsible lending obligations, the credit licensee must not enter into or assist with a contract that is unsuitable.

The exact assessment requirements depend on the provider, the product and the laws that apply. You must also provide complete and accurate information about your financial circumstances.

Approval is never guaranteed or an entitlement.

Can I Cancel a Loan After Signing the Contract?

There is no universal cooling-off period covering every Australian credit product.

Cancellation and early repayment rights depend on the type of credit, the contract and the legislation that applies. Check the contract immediately and contact the provider if you no longer want the credit.

What Happens if I Cannot Make My Next Repayment?

Contact the provider before the payment is due. Explain what has changed and ask about hardship or repayment options.

We recommend avoiding another high-cost credit product simply to cover the repayment without first considering the additional cost and whether this could contribute to a cycle of debt.

Can a Debt Collector Contact My Family or Employer?

A debt collector may sometimes contact another person to locate you, but must not improperly reveal information about your debt.

Collectors must respect your privacy and must not harass, coerce or mislead you. Keep records of inappropriate contact and complain to the creditor, collector, AFCA or another relevant regulator where appropriate.

Can I Dispute a Default on My Credit Report?

Yes. You can request an investigation when you believe information is inaccurate, duplicated, outdated or does not relate to you.

Ask the credit provider or credit reporting body to explain the listing and provide supporting information. Requesting a correction is free.

Does Meeting a Provider’s Eligibility Rules Guarantee Approval?

No. Eligibility criteria are only the starting point.

A provider may also assess affordability, suitability, income, expenses, account conduct and other relevant information. Meeting basic eligibility criteria does not guarantee that an application will be approved.

Know Your Rights Before You Agree to Credit

Understanding your rights can help you compare products, identify unfair treatment and act early when repayments become difficult.

Before accepting credit, read the full terms, calculate the total cost and consider how the repayment will affect your next pay cycle and household budget.

For information about our current eligibility criteria, charges, repayment process and intended target market, review our FAQs and Target Market Determination before applying. Terms, conditions, assessment and eligibility requirements apply.

The information provided in this article is for general informational purposes only and does not constitute financial advice. It is not tailored to the circumstances of any individual. Before acting on this information, you should consider whether it is appropriate for you, having regard to your objectives, financial situation and needs.