Author: LoanOne

Banking Royal commission: Five Financial Traps Revealed

financial trap

The Banking Royal Commission has faced a lot of scrutiny, especially after they released their interim report.

The report left so many dismayed especially with the greed being laid bare by a number of financial institutions.

It came with a lot of bad things such as selling credit insurance to entities who could never collect and charging for higher mortgage packages without offering the promised discounts.

All of this has been dubbed to be bad for the people, and all these exploits are listed below with some financial traps revealed. Read on:

First trap

The first trap is by reducing the amount of money you pay for a mortgage when it is too high.

For some time, lenders only adjusted your repayment amount if the interest rates increased.

This was logical since the remaining amount was not a direct reflection of your liability. However, lenders are now taking the approach of reducing repayments to a certain level.

This is bad since the interest rates apply across all the repayments and the only way that they should be adjusted is upwards.

You should try and avoid this and set a high repayment rate to avoid facing the wrath of paying huge interest.

Second Trap

For a long time, credit cards have been the reason behind the financial difficulties experienced by people.

Here is where some of the financial traps come into the picture.

It is advisable to avoid withdrawing cash with your credit card or paying for purchases with it unless it is really urgent.

Studies reveal that credit card transactions accrue interest of about 20% and this is staggering.

This is exceptionally high and proves that credit cards are terrible since you pay a lot for the advances.

Third Trap

We are still on credit cards, and they are a tough prison to get out of. Look at examples of a credit card that would take one more than a hundred years to pay it off.

The interest rates on these cards have remained standard over the years despite the official rates falling slightly.

However, this is not the problem since the lenders set minimum repayments at two per cent of your balance, something that could make your debt increase gradually if you pay this minimal amount.

Fourth Trap

These traps entail two pitfalls that should be avoided when dealing with credit cards.

Do not use your card for new spending since the interests are used to cover the interest-free days.

Furthermore, do not pay off your card balance during the interest-free days since you will make up for the money lost.

This is risky for users who might be oblivious to the implications and issuers should be required to tell customers when their interest-free period is about to elapse.

Fifth Trap?

This is the incoming one, and it is set to define the borrowing fray in the coming years. Setting the borrowing rate based on one’s risk is a huge trap.

It is already applied in the peer to peer lending seen with personal loans.

Banks are expected to start sourcing for information about an individual in a bid to try and set personal borrowing rates for you.

This is bad especially if your credit report is terrible due to a couple of financial struggles as you will have to pay more.

If you’re looking for some business or personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

Determining The Viability Of Business Loans For Expansion Projects

business expansion loans

Starting a business and seeing it through to the stage where everything stabilises and it starts generating income steadily is no mean feat.

Some of these firms take months or even years before one begins to see some significant amount of profit.

One major challenge that small startups face is sourcing resources to fund for their operations and expansion projects.

Even if you decide to bootstrap your business and fund it from your personal cash pool, there may come a time where this money becomes insufficient and you are forced to source for more elsewhere.

The most common option is going for business loans but is it really a good option? Read on and find out more:

Analyse Your Expansion Prospects

A business loan is a debt that you will have to pay and thus it is essential to understand the risk at stake. Look at the viability of your expansion project.

Is it really the best financial choice? Some of these expansion projects backfire and could affect the business’ progress in no small way.

Conduct an in-depth analysis of your new location or expansion prospects and be assured that it will benefit your business and help you to pay off the loan.

Consult experienced business mentors who have seen such situations for you to get a practical view of how things work.

If the prospects are good, go ahead and take the business loan.

Understand Debt Financing

Try to understand business loans before determining whether it is a good choice for your case or not.

Debt financing is not very different from personal loans and they only vary with what they one intends to do with them.

You can take a general business loan, a cash advance against credit card income, loan to purchase equipment or a commercial mortgage loan.

Business loans are a popular option since their terms are very clear and finite and a business owner can still control their business fully as opposed to other options such as equity financing.

The repayment and interest terms are an essential thing to look at since they could hurt your business if most of the money you make will be used to service the loan.

The main downside of these loans is the losses that a business experiences when they are unable to pay back the agreed amount.

This is not out of the picture since the expansion project can fail to live up to expectations.

Businesses could do with some extra financing and there is no doubt that business loans offer them the much-needed cash boost to fund an expansion project.

However, business loans come with their risks and they can even run down a business if the anticipated returns were unrealistic or the amount was too much for the business.

Before taking a business loan for your company, conduct the necessary research and prove that this project is good for your firm.

Do not be overly optimistic with the expansion prospect and plan for a situation where the project won’t yield the anticipated returns.

This way, you will be prepared for the best and worst case scenario and your company will continue running even after the loan.

If you’re looking for some business loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

Different Types Of Business Loans

business loans

It is well known that most small businesses have limited resources and require loans to help them expand or introduce new operations.

Before applying for a business loan, it is important to know which one works for you since there are many types of these loans.

This can be aided by proper planning to determine whether your business needs the loan and how the new commodity or the expansion project will help you to repay the loan.

This is particularly important with massive loans that could threaten the operations of a business if it does not yield the desired impact or boost in its income and profits.

Here are some common types of business loans;

Overdrafts

These are loans where a bank or financial institution allows you to withdraw more money than you have in the account.

A business can transact up to the credit limit placed on the account.

The payment plan depends on the type of account you are holding an agreement with the financial institution.

These loans are suitable for short term needs, fast to arrange and accrue no charges if you pay the amount earlier than expected.

Failing to pay back within the agreed time could hurt your company’s credit score. Overdrafts are somewhat similar to the business lines of credit loans.

These provide access up to a certain credit limit, and the interest is paid for the amount you have borrowed.

Term Loans

These are the common loans where the business gets a lump sum and repays the amount over a predetermined amount of time in instalments.

Term loans vary greatly with what they are intended to do as specified by the lenders.

The advantage of these loans is that you get the whole amount and this makes it easier to plan on what to do with it.

They also offer you a large amount upfront, and you can get this amount faster if you opt for the online lenders.

However, these loans are secured and require some form of collateral. Their costs also vary depending on the lender and always be careful to avoid expensive loans.

Equipment Loans

These are loans that are given to business to finance the purchase of certain equipment. The term of the loan is connected with the lifespan of the machinery.

The equipment is used as collateral for the loan, and the rates depend on the impact of the machine on the production process, its value and financial strength of the business.

The good thing about these loans is that you own the machine and build equity in it.

The downsides are that you might have to pay a down payment and there is a probability of the machine ageing before you finish paying up the loan.

Some common types of business loans include;

• Business credit cards.
• Invoice financing.
• Merchant cash advances.
• Invoice factoring.
• Personal loans.

We have seen here that businesses have various options when it comes to sourcing for finances and all you need to do is to find the most suitable one for yours.

Always analyse the financial viability of the loan for your business since too much debt can easily bring down a company.

If you’re looking for some business loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

How Can I Get A Loan For Business Expansion In Australia?

Are you looking to expand your small business? Securing small business finance isn’t difficult when you know where to go.

Choosing the right business loan provider in Australia isn’t easy. There are hundreds of lenders operating across the country.

However, all these agencies are not created the same. Your research plays an important part when choosing the best business finance institution in the country.

This article answers the question of “how can I get a loan for business expansion in Australia?

Expansion is a frequent consideration when one owns a small business.

Whether you plan to expand because of increased revenue to the business or the need for more employees, it takes money to expand a business.

However, if you don’t have enough cash reserves or don’t want to strain the cash flow, you should consider a business expansion loan.

There are different types of expansion loans offered by lenders. These loans are meant to meet the short-and-long-term business needs of the company.

Here are some of the most common types of business loans available in Australia.

Start-up Loans – A start-up loan is ideal to purchase new equipment, tools, and supplies to your business.

If you plan to add a new location or a different product line to your business, you can apply for a start-up loan.

Business Inventory Loans – Most small businesses cannot further progress because they don’t have an inventory of products to meet the demand of their customers.

A business inventory loan is best suited to this type of business. It lets you purchase raw materials, supplies, and equipment to manufacture more products and meet customer demand.

Business Expansion Loans – These loans are ideal if you plan to further expand your business by setting up another office or outlet.

Equipment and Tools Loans – You can rely on this loan to purchase equipment and tools for your company. You can improve the production of your business with such a loan.

Business Vehicle Loans – Extra vehicles can help serve a wide range of clients. A vehicle loan will let you purchase or lease new vehicles for your company.

Business Property Loans – These loans are ideal if you plan to purchase commercial property to expand your business.

Trade Loans – These loans are ideal for businesses that are into import and export or domestic trading. This type of loan will help expand your business and guarantee industry longevity.

LoanOne is a top-notch business loan provider in Australia. Getting a business loan from LoanOne is a straightforward process.

They understand Australian small businesses like no other lender in the country.

The company offers easy, timely, and economic funding solutions to a wide range of businesses in Australia.

Their loans are paper-free, flexible, and don’t need extensive supporting documents. The company’s mission is to help Australian small businesses get business financing fast and efficiently.

They offer competitive interest rates in the industry. Call them today for all your small business financing needs in Australia.

If you’re looking for some business or personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

How Has The Banking Royal Commission Impacted Lending Practices?

If you plan to apply for a mortgage or business loan in Australia, the process might be more challenging than before.

This is because of the report released by the Banking Royal Commission.

The big banks in the country are tightening their financial lending practices because of the recommendations of the Royal Commission.

Many borrowers have been wondering how the findings of the commission will impact lending practices in Australia.

This article provides information on how the Banking Royal Commission will impact lending practices in Australia.

What Things Did The Banking Royal Commission Uncover?


The main role of the Banking Commission is to look into misconduct cases by the big banks and financial institutions in Australia.

Many wrongdoings of financial institutions have come into the light with the latest findings of the commission.

The commission has uncovered forged documents, mis-sold insurance, bribery, and other breaches of good lending practices.

The National Consumer Credit Protection Act (NCCP) implemented in 2009 was the last major reform to ethical standards in lending in Australia.

The recommendations of the Banking Royal Commission will be added to the NCCP.

What Changes Have Been Made So Far?

There are more stringent compliance checks already introduced into the application process of a loan. The application processes have lengthened as a result.

Borrowers will have to disclose more information than in the past with the recommendations of the commission.

The borrowing process is going to be tougher than in the past. Hence, consumers should be ready to face stiff interrogation by lending institutions when applying for a loan in the future.

Banks are building in “lending buffers” to ensure the borrower can repay the loan without defaulting on it.

Commercial banks in Australia have started asking for more bank statements to prove the income and repayment capability of the borrower when applying for personal loans.

A history of good financial conduct was enough to approve a personal loan in the past.

With the recommendations of the Banking Commission, lenders have got their act together.

What Impact Are These Changes Having?

The borrower may find it difficult to get approved for a personal loan just by having a good history of financial conduct. The process may be very black and white now.

The borrowing capacity will be brought down to reduce borrower defaults in the country.

Even though the big banks in Australia are tightening their lending processes, the smaller banks and lending institutions stand to gain from the opportunity.

They are increasing the number of lending options so that borrowers can choose the most suitable option.

The latest statistics show that borrowers are frequenting smaller banks and lending institutions for loans after the recommendations of the Banking Commission.

There are many things to consider when applying for a loan in the current environment.

  • Planning early is very important. Talk to the bank or lender as early as possible so that you are ready to answer all their questions and collect all the supporting documents on time.
  • Pre-approval is very important when applying for a loan. Getting pre-approved for a loan will increase lender confidence in you.

If you’re looking for some business or personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

How Is Interest Calculated On A Personal Loan?

interest loan calculation

A personal loan is money that is borrowed normally at a fixed interest rate from a financial institution or another type of lender over a short term.

A short term is normally between one and three years. The loan amount that is awarded can be used to fund any purchase, consolidate debt or for just about any other reason.

In most cases, no reason for the loan is required and no security or collateral is necessary for approval.

An establishment fee may, however, apply which is the cost of setting up the loan.

This amount is normally added to the principal loan amount and paid off over the same term or period as the loan.

Monthly or weekly instalments or repayments may be applicable.

What Is Interest On A Personal Loan?

Interest is a percentage of the principal loan amount that the lender charges in order for it to be profitable.

In Australia, the government regulated annual percentage rate is 48% for a personal loan which means that a lender must not charge interest in excess of 48%.

How Is Interest On A Personal Loan Calculated??

There are 3 important factors that need to be considered when calculating the amount of interest that you will need to pay on a monthly basis – the interest rate, the repayment term and the principal loan amount.

For example:

A loan of $2,000 that is taken over a period of 12 months at an APR of 48% with monthly repayments will be calculated as follows:

Divide the interest rate by 100 – 48% divided by 100 = 0.48

Divide this amount by the term of the APR which is 12 months – 0.48 divided by 12 = 0.04

Multiply this amount by the principal loan amount which is $2,000 – 0.04 multiplied by $2,000 = $80

You will be paying $80 in interest every month with a total interest of $960 on a $2,000 loan over one year.

Interest cannot be charged on an establishment fee that has been added to the principal loan amount.

How To Calculate A Monthly Repayment

Take your principal loan amount and divide it by the term of the loan and this will give you your monthly instalment without interest.

Add the interest and you will arrive at the figure that you will need to repay on a monthly basis.

Using the above example:

$2,000 divided by 12 = $166.67

Add you interest as calculated above to this amount – $166.67 + $80 = 246.67

You will be paying a total monthly repayment of $246.67

If an establishment fee (let’s say $400 for use in this example) is added to the principal loan amount and spread over the term, the calculation will be as follows:

Principal loan amount + establishment fee – $2,000 + $400 = $2,400

Divide this amount by the term (12 months) – $2,400 divided by 12 = $200

Add the interest as calculated above to this amount – $200 + $80 = $280

You will be paying a total of $280 every month for 12 months to repay the loan.

If you’re looking for some personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

How The Royal Commission Into Banking Practices Impacts You?

australian banking

After 69 days of collecting evidence and over 10,000 public subcommissions, the Royal Commission into Banking released its report recently.

The main goal of the commission was to expose the dodgy practices and wrongdoings of financial institutions and banks in Australia.

There is going to be massive changes in the financial industry – assuming the Australian government heeds the advice of the commissioner Kenneth Hayne.

These wide-ranging reforms are going to impact everyone at some level. This article provides information on how the Royal Commission into banking practices impact you.

What Recommendations Were Made?

The report of the Royal Commission into Banking practices in Australia contains over 72 recommendations for implementation. These recommendations are wide-ranging.

However, they are designed to guide the behaviours of banks and financial institutions in Australia. Mortgage brokers are the most affected by these recommendations.

Mortgage brokers currently get their commissions from the banks and not the consumers they serve. Hence, their loyalties are with the banks.

How can a consumer expect sound financial advice from them when they are bound to serve their masters – the banks?

The Commission proposes to change this practice and recommends that the consumer pay the commission to the broker and not the bank.

They expect better consumer-oriented services from mortgage brokers with such changes.

There are massive gaps in the way mortgage brokers currently operate.

Changing The Rules

If you plan to buy a house and enlist the services of a mortgage broker, there are no rules to say the broker should act with your interest in mind.

The broker is currently protecting the interests of the bank since they are paid by the banks. The commission wants to change the way mortgage brokers operate.

They recommend implementing certain rules to get the broker to have the interests of the consumer in mind. This is an important change if it could be implemented properly.

With consumers having to pay the broker commission when applying for a mortgage loan through a broker, more consumers will ditch the middleman and approach the bank directly.

Mortgage brokers may lose a lot of business because of this. Banks may have to hire new staff to deal with the increase in loan applications.

A mortgage broker gets a bigger commission from the bank when they sell bigger loans to consumers.

Hence, they will entice the consumer to go for a bigger loan to get a better commission from the bank.

However, banks don’t have to do the same thing. Hence, consumer loans will become smaller once the consumer approaches the bank directly.

Superannuation Industry Also Under Scrutiny

The commission has also given a lot of attention to the superannuation industry.

A number of big providers like the Commonwealth Bank, Suncorp, IOOF, and NAB will be referred to regulators to see whether civil or criminal proceedings should be instigated against them for dodgy practices.

If you have super with one of these institutions, you should check your statements and the fees paid to them.

If you’re looking for some business or personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

Important Tips For Getting A Personal Loan

personal loans tips

Every year, millions of people take out personal loans to cater for various things.

We all come across situations where we might be short of money and getting a personal loan is one of the best ways of sourcing for it.

However, why are they appealing to many people?

Well, lenders have diversified these loans and come up with custom ones that are suitable for people who need the money for all sorts of things.

While these loans are a good way of getting around a tight financial situation, you need to understand your options.

You do not want to find yourself on the wrong side of a personal loan. Here are some important things to look out for when getting a personal loan.

Understand How They Work

While personal loans vary significantly, their underlying principle is more or less the same.

They are instalment loans where you borrow a fixed amount and pay it in instalments over an agreed period.

The total amount you pay at the end of the period is higher than what you borrowed as the loan accrues some interest.

It is essential to agree on an instalment that you are comfortable with since defaulting in the payments could have severe implications on your credit score.

?Types Of Loans

There are different types of personal loans, and they can be broadly categorised into two groups.

Unsecured loans which are not backed by any collateral. Then there are secured loans which are backed by collateral such as savings, property, a car or a business.

This collateral assures the lender that if you default on the payment, they could seize the item placed as collateral and claim it as payment for the loan.

Lender Options

The most common entities you can go to for personal loans are banks. However, there are now dozens of financial institutions that offer these loans.

This is particularly evident with the short-term loans where one can get money by just applying for it online.

However, be careful when selecting a lender and check whether they are legitimate.

Read through the terms and conditions of the loan carefully before picking one since some of them have bad terms that could mess you up later on.

How To Get Your Loan Approved

Not everyone can get a loan, and you need to know what to do for your application to be approved.

First, ensure that you meet the set criteria such as age, citizenship, minimum income, and credit score.

Apply for the right amount since the lenders will assess whether your income is capable of supporting the repayment.

It also helps to build a strong credit rating since lenders will look at this when determining your creditworthiness. Lastly, pick the best lender.

You are not limited to anyone and you should carefully analyse the options before choosing one.

Always look at the terms and conditions while checking the types of loans that these people specialise in.

Some of the critical things to look at when getting a personal loan have been mentioned.

Getting one is not hard once you know what you need and understand your financial strength.

If you’re looking for some personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

Reasons Why More People Are Taking Personal Loans

reasons for taking personal loans

We all need money for various reasons and situations. However, more often than not, we are short of it.

Such circumstances force people to source for funds outside their regular income or business profits to sort out pressing needs and then pay back the money later on.

While you can source money from many places, one common and popular place where people go to are the money lending institutions that offer personal loans.

These sources are a sure way of getting any amount you want depending on your creditworthiness.

Compared to the other sources of money, personal loans are growing extremely popular in recent years as seen from the number of people taking them.

However, why is this happening? The best guess could be the benefits of taking such loans as opposed to the other sources. Read on further to find out.

Customised Options

A few years back, the kinds of loans one could get from a bank or any lender were few.

Banks were very rigid with their lending options, and people were being forced to take loans that were not suitable for them.

Nowadays, things have changed, and the increased competition between the lending institutions has forced them to diversify and come up with customer friendly options.

You do not have to stick to the preplanned loans as a lender can come up with a custom option that suits your needs and won’t hurt you when repaying it.

This has prompted many people to go and take personal loans since their needs have been catered for and they do not have to compromise.

This means that they don’t have to take on loans that do not suit them.

Fast

Long gone are the days where you would apply for a loan and wait for weeks before getting a response from the lenders.

These institutions have become proactive, and you will get a decision on whether your application has been approved within a very short time.

Short term loans are available for people who need some money quick. This has rapidly changed the lending landscape.

These days, lenders do not tend to conduct extensive background research on the borrower which means one can get the money in a couple of hours.

Most of these lenders have online platforms and automated systems where one can apply for a loan and get feedback fast.

This has encouraged more people to take these loans since doing it has become so much more easier.

Flexibility

Personal loans have an element of flexibility, and this is why more people are applying for them.

The term personal loan is a broad category that entails different types of loans such as car loans, education loans, emergency loans among others.

There is a loan for every need you have, and this makes things better for the borrower.

The different types of loans have competitive and distinct characteristics making them ideally suited to all the various scenarios.

Here we have discussed the benefits of personal loans, which highlights why more and more people are taking them today.

A personal loan is a good way of getting money fast, and the flexibility means that you can pay the amount back gradually depending on your income and financial capability.

If you’re looking for some personal loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.

Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan

The Royal Commission Could Trigger Big Changes In Home Loans

home loans

After 68 days of hearings and over 10,000 public subcommissions, The Royal Commission released its final report at the beginning of February.

This report is based on the findings of dodgy practices by banks, insurance, and superannuation companies operating in Australia.

Commissioner Kenneth Hayne made 76 recommendations in the final report and the federal government said they would act on all of them.

How will this report affect the housing market in Australia? This is what most consumers want to know.

This article provides information on how the final report of the Royal Commission could trigger big changes in home loans across Australia.

Mortgage Brokers Targeted

The Commission spent a long time looking at various issues of the lending industry in Australia.

They were of the view that lenders and advisors should always have the best interests of their consumers in mind when they sell or recommend a financial product.

The operations of mortgage brokers came under the radar of the commission. The Royal Commission found massive gaps in the operations of mortgage brokers in the country.

When a consumer plans to buy a house and goes to a mortgage broker for assistance, there is no rule to say that the broker should act in the best interest of the consumer.

Brokers Not Acting On Behalf Of Customers

The broker gets his commission from the bank and not the consumer. Hence, the broker will act with the best interest of the bank in their mind when recommending a mortgage to the consumer.

They may recommend a loan with a higher interest since the broker gets his payment from the bank.

There are many instances where the broker would try to sell a loan worth more than what the consumer originally expected.

It’s not uncommon for brokers to recommend bigger loans to their consumers to get a better commission from the bank.

The commission thinks that this practice needs to stop with immediate effect.

Mortgage brokers are getting rich by selling larger home loans to millions of consumers across Australia.

Going to a bank to get a housing loan is an outdated practice in Australia. These days, over 50% of home loans come from mortgage brokers in the country.

New Rules For Mortgage Brokers

The commission plans to change this practice by implementing rules that prevent brokers from collecting trailing commissions from banks.

This could cut down on the mortgage broker’s pay.

The commission thinks that the commissions received by the brokers from banks is tantamount to “conflicted remuneration.”

Broker’s are loyal to the banks and not the consumers since they get the commissions from the banks.

The commission recommends that consumers should pay the commission to the broker and not the bank.

So, how will these recommendations impact the housing industry in Australia?

Impact On The Housing Industry


Experts believe that the recommendations of the commission can seriously impact the housing industry in Australia.

Consumers would cut out the middleman and go directly to the bank for mortgage loans. A bank may have a limited range of loans to offer the consumer.

The bank may save on commissions since they don’t have to pay the mortgage broker. However, they have to hire new staff to deal with the expansion of loan applications.

Consumers will end up with smaller loans by directly approaching the bank since there is no broker to entice them to get a bigger loan.

All this can eventually have a considerable effect the housing market in Australia.

If you’re looking for some personal or business loan options from a trusted non-bank lender look no further than LoanONE.

Visit our application page and see if you qualify today.


Additional Reading:

The Difference Between Good and Bad Debt

4 Simple Ways To Repay A Personal Loan Sooner

How To Put Debt To Work For Your Business

Case For Borrowing Money Instead

8 Mistakes You Should Avoid When You Get A Small Business Loan