Responsible Lending in Australia

The National Consumer Credit Protection Act 2009

Australia's responsible lending framework is governed by the National Consumer Credit Protection Act 2009 (NCCP Act). This legislation requires all credit providers to hold an Australian Credit Licence (ACL) and comply with responsible lending conduct obligations.

Responsible lending obligations

Before offering you credit, lenders must:

Make reasonable enquiries about your financial situation, requirements, and objectives
Take reasonable steps to verify your financial situation
Make a preliminary assessment that the credit contract is "not unsuitable" for you
Not enter into a credit contract or increase a credit limit if it would cause you substantial hardship

Understanding comparison rates

In Australia, lenders are legally required to display a comparison rate alongside any advertised interest rate. The comparison rate is calculated on a standard A$30,000 unsecured loan over 5 years and includes most fees and charges.

WARNING: The comparison rate applies only to the example given. Different loan amounts and terms will result in different comparison rates. Always check the comparison rate for your specific loan scenario.

SACC and MACC protections

Australian law provides additional protections for smaller loans:

Small Amount Credit Contracts (SACCs) — Loans of A$2,000 or less. Maximum fees: 20% establishment fee plus 4% of the loan amount per month. No interest charges are permitted.
Medium Amount Credit Contracts (MACCs) — Loans of A$2,001 to A$5,000. Maximum annual percentage rate capped at 48%.

Your rights as a borrower

Right to receive a copy of your credit contract and all pre-contractual disclosures
Right to a hardship variation if you're unable to meet repayments
Right to lodge a complaint with your lender and escalate to AFCA if unresolved
Right to access your credit report from Equifax, Experian, or illion
Right to request a debt repayment arrangement under the Bankruptcy Act 1966

Borrow responsibly

Before taking out a personal loan, consider these guidelines:

Budget first — Ensure repayments fit within your monthly budget (ideally less than 30% of take-home pay)
Compare properly — Look at comparison rates, not just advertised rates
Read the PDS — Understand all fees, charges, and terms before signing
Borrow only what you need — Larger loans cost more in total interest
Check for exit fees — Some lenders charge early repayment fees
Seek help if struggling — Contact the National Debt Helpline on 1800 007 007

Where to get help

ASIC MoneySmart — Free financial guidance from the Australian Government
AFCA — Australian Financial Complaints Authority (free dispute resolution)
National Debt Helpline — 1800 007 007 (free financial counselling)
ndh.org.au — National Debt Helpline online resources

Frequently asked questions

What is responsible lending in Australia?

Under the NCCP Act 2009, lenders must conduct a suitability assessment before offering credit. They must verify your financial situation and ensure the loan will not cause substantial financial hardship.

What is a comparison rate?

A comparison rate includes the interest rate plus most fees and charges, calculated on a A$30,000 unsecured loan over 5 years. It helps you compare the true cost of different loans.

What are SACC and MACC loans?

SACCs (Small Amount Credit Contracts) are loans of A$2,000 or less with capped fees of 20% establishment plus 4% per month. MACCs (Medium Amount Credit Contracts) are A$2,001–A$5,000 with a maximum 48% APR.

How do I lodge a complaint about a lender?

Contact the lender directly first. If unresolved, lodge a complaint with AFCA (Australian Financial Complaints Authority) at afca.org.au. You can also report concerns to ASIC via moneysmart.gov.au.

What should I consider before taking out a personal loan?

Consider whether you can comfortably afford the repayments (aim for less than 30% of take-home pay), compare comparison rates from multiple lenders, read the PDS and TMD, and check for any fees including early repayment charges.

Is Credizen a lender?

No. Credizen is a free loan comparison service. We do not provide financial advice, assess applications, or make lending decisions. We connect you with ASIC-regulated lenders based on your preferences.

Last updated: April 2026