NAB has welcomed a new reform to give customers more protection when it comes to payday loans.
The Financial Sector Reform Bill 2022 passed by Parliament today provide enhancements to the national credit laws that apply to payday loans and consumer leases.
These changes will ensure that payday lenders and consumer lease providers cannot take more than 10 per cent of a person’s net income for loan repayments, stop predatory marketing and unsolicited communications, and prohibit lenders from charging monthly fees for the residual of the loan term if the borrower pays off the balance early.
NAB Head of Customer Vulnerability, Mike Chambers, said:
“This reform is an important step in protecting Australians from predatory lenders.
“It is often in desperate times that people access payday loans as a ‘quick-fix’ to make ends meet, without knowing the hidden costs involved.
“These debts can often spiral, leading to more long-term debt. It is important regulations are in place to stop this happening.”
Recent NAB research revealed one in 10 Australians facing financial hardship have accessed a payday loan in Q3 this year, and the loans were the third most common type of debt used to manage financial hardship.
NAB partners with Good Shepherd to provide no interest loans for Australians on low incomes to help finance things like emergency essentials, cars or whitegoods.
In the past 12 months, NAB has provided the capital for $47 million of no interest loans for around 68,000 Australians.
- Requests for financial hardship assistance can be made through NAB Assist.
- For access to independent financial counsellors, please contact the Debt Helpline on 1800 007 007 or moneysmart.gov.au.
- To find out about No Interest Loans, please contact Good Shepherd’s No Interest Loan Team on 13 64 57 or Good Shepherd Australia.