Rates | Fees | Disclosures

 

Standard Loan Agreement and Disclosures

Our standard loan agreement contains the disclosures required under the Credit Contracts and Consumer Finance Act.

 

Rates

  1. If you qualify for a loan from us, the loan is a 'flexi-pay loan' with an interest rate of 14.95% per annum and a minimum payment per week of $49
  2. You can pay more at any time to reduce your loan and save on interest
  3. There are no additional fees for paying your loan off early
  4. There is no application or establishment fee on your loan
  5. If you default on your weekly installment we don't double it, we just debit $49 again the next week and extend your loan term.  This means we avoid increasing any financial stress on you if that occurs
  6. You can voluntarily pay more at any time - so you can easily reduce your loan term when you have more money again if you want to

 

Example;

Here's an example for a $3,000 loan paid off over 34 weeks (about 8 months). In this case, the student wanted to do some professional development in digital marketing completing online certifications from the USA. 

Initial Loan Amount Annual Interest Rate (%) Compound Periods (per year) Term (weeks) Actual Interest Paid Minimum weekly payment Additional Payments Effective Rate (%)
$3,000 14.95 1 34 $155.12 $49 $1500 5.17

Here is a breakdown of this loan

 

Loan summary;

  • The student borrowed $3,000 at 14.95% per annum with a minimum payment of $49 a week
  • The student paid the minimum and in week 12 when they had some more funds, they paid an additional $1,000
  • They paid an additional $500 in week 30 as well
  • Their loan was fully repaid in week 34
  • Their effective interest rate (the total interest they paid divided by the original borrowing) was just 5.17%
  • The student never defaulted on payments so didn't incur any default fees
  • The student didn't apply for any hardship relief so didn't incur any loan variation fees
  • There is no charge for the student to apply for or establish the loan, or pay it off early
  • The student has only paid interest for the time they are using the loan for their education

 

Fees

Our approach is to offer very flexible, low cost, financially fair, and easy to administer student loans.  We can do this because of the automation we use, and because we predominantly lend online and directly through education providers who want to give students choice and convenience. 

However, we do charge fees if we have to chase payments, vary loans, or pursue debt.  In general terms you will be charged additional fees where;

  1. You don't pay your installments when they are due
  2. You request relief such as a payment holiday and/or a reduced weekly installment amount
  3. You neglect to meet your payment obligations on a sustained basis and we have to send your debt to a collector or get a lawyer involved

A summary of our fees charged when you depart from your loan agreement are below.  You can also find details of how and when we apply these fees in our standard loan agreement template.

 

Fee/Charge Amount
 When it's charged How it's applied
 Why it's charged
Default interest charge 14.95% p.a. When you default on a payment It is applied to the outstanding balance Because we need to charge interest on money you haven't paid back
Dishonored payment fee $20 When you miss an installment or part pay an installment We just add it to your outstanding balance Because you didn't pay so we don't have the money in our bank
Payment reduction (loan term extension) fee $150 When you apply for hardship relief through the online form and we accept the variation We add it to your outstanding balance Because it takes us time and costs us money to change loans
Payment holiday (loan term extension fee) $150 When you apply for hardship relief through the online form and we accept the variation We add it to your outstanding balance Because it takes us time and costs us money to change loans
Loan variation interest rate charge 5% When we vary your loan by way of payment reduction and/or payment holiday It's added to your interest rate for each variation you request Because your risk profile for repayment is getting worse and we have to factor that in
Debt collection fees approximately 25% If your debt is assigned to a debt collection agency you must pay their costs.  Most charge around 25% on top of the debt they are working to recover Applied to your balance when it is loaded to debt collection Because the debt collection agency has costs that need to be met when they pursue a debt
Solicitor's fees Varies If we have to instruct a solicitor to act for us to collect unpaid debt Added to your debt Because if you don't pay and we need to hire a lawyer it's a cost we hadn't budgeted in when we lent you the money initially

 

Saving Interest on Your Loan

Here are some details on how you can save interest costs by making extra payments on your loan when you can.