What does this mean for borrowers?
On September 25th 2020, Treasurer Joshua Frydenberg announced that changes to some of the responsible lending rules would be made to help the bank’s approve loan for consumers and small business easier and faster. So what will this look like for you as a borrower?
So far this is great news. It will mean that borrowing policies will be less stringent. The idea is that accessing funds will be a more simplified process and therefore mean that it will become easier to get a loan. Now what we don’t know are the finer details. What changes exactly will be implemented? What type of documentation will be required? Bearing in mind responsible lending was put in place in the wake of the 2009 global financial crisis. The royal commission made sure that lending practices were adhered to to protect people from over borrowing, making lenders verify everyone’s living expenses to ensure they had the capacity to repay the loan. And next year they’re also releasing a requirement for us as brokers to implement a best interest duty. Which is to ensure we prioritise your best interest when providing you with credit assistance.
So how all this is going to play out is still uncertain until the government finalise and implement reforms. But it is still great news that the treasurer has acknowledged that accessing needs to be available a lot quicker and more simplified.
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