Understanding your rights and obligations under the National Consumer Credit Protection Act (NCCP Act). Learn how to borrow safely, recognise warning signs, and access help when you need it.
Only borrow money you can afford to repay. Taking on debt you cannot service can lead to financial hardship, damaged credit scores, and legal action. If you're experiencing financial difficulty, seek free help from the National Debt Helpline (1800 007 007) or a financial counsellor before taking out a loan.
Under the National Consumer Credit Protection Act 2009 (NCCP Act), all ASIC-licensed lenders in Australia must follow responsible lending obligations. This means lenders must:
Lenders must make reasonable inquiries about your income, expenses, existing debts, and financial commitments to determine if you can afford the loan without substantial hardship.
Lenders must take reasonable steps to verify the information you provide about your financial situation, typically by requesting payslips, bank statements, or tax returns.
Lenders must assess whether the loan meets your requirements and objectives, and whether you could repay it without substantial hardship.
Before you sign, lenders must give you clear information about interest rates, fees, repayment terms, and your rights (including cooling-off periods).
You have the right to receive clear, understandable information about:
Lenders must not provide you with credit if:
If a lender approves an unsuitable loan, you may have grounds for complaint through AFCA.
If you're experiencing financial difficulty, you have the right to request:
Contact your lender as soon as possible if you're struggling. Most lenders have dedicated hardship teams to help you find a solution.
If you have a complaint about a lender, you can escalate to:
Try to resolve the issue directly with the lender's internal dispute resolution team.
If unresolved, contact the Australian Financial Complaints Authority (AFCA) for free, independent dispute resolution.
Report serious misconduct to ASIC via their online reporting tool.
Before applying for a loan, ask yourself these questions:
Do I really need this loan, or can I save up and avoid borrowing?
Have I compared multiple lenders to find the best interest rate and terms?
Can I afford the monthly repayments without struggling to pay for essentials (rent, food, utilities)?
Have I calculated the total cost of the loan (including all fees and interest)?
Do I understand what happens if I miss a payment?
Have I checked the lender is ASIC-licensed and legitimate?
Have I read and understood the loan contract before signing?
Do I have a backup plan if my income reduces or expenses increase?
Am I borrowing the smallest amount I need, rather than the maximum available?
Have I considered whether I could pay off the loan early to save on interest?
If you answered "no" or "I'm not sure" to any of these questions, take more time to research before applying.
Seek help immediately if you notice any of these warning signs:
Using one loan to repay another (debt cycling)
Regularly missing loan repayments or other bills
Borrowing to cover basic living expenses
Receiving default notices or legal threats
Hiding debt from family members or partners
Feeling constantly stressed or anxious about money
Having no emergency savings or financial buffer
Considering payday loans or high-cost credit
1800 007 007
Free, confidential financial counselling for anyone struggling with debt. Available Monday to Friday, 9:30am – 4:30pm (local time).
Visit ndh.org.au →Free tools, calculators, and guidance on borrowing, budgeting, and managing money. Includes a personal loan calculator and comparison rate explanations.
Visit moneysmart.gov.au →Find a local financial counsellor in your area. Financial counsellors are qualified professionals who provide free, independent advice on managing debt and financial hardship.
Find a counsellor →13 11 14
If financial stress is affecting your mental health, Lifeline provides 24/7 crisis support and suicide prevention services.
Visit lifeline.org.au →Before committing to a loan, use the MoneySmart personal loan calculator to understand:
When you're ready to borrow responsibly, compare lenders who follow the NCCP Act and prioritise consumer protection.