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| A
credit reference agency that is the largest source of
credit information about Australian consumers. |
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| A
law governing consumer lending in Australia. |
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| An
agreement between two or more parties, usually in writing
and enforceable by law. |
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| Borrowed
money that allows us to obtain goods now, but pay for
them later. Typical forms of credit include credit cards,
personal loans, overdrafts and home loans. |
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| An
agreement between a lender and a borrower that sets out
the terms and conditions of the loan (see also the definition
of 'contract'). |
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| A
card that is linked to a set amount of credit which can
be used to purchase goods and services now, but pay for
them later. |
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| A
file containing information about an individual consumer's
history of mismanaging debts and repayments. Also called
a 'credit history'. Credit files are kept and maintained
by credit agencies, and may be accessed by banks and financial
institutions if the individual has made an application
for credit. |
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| Credit
limit is the amount of debt committed under the terms
of the agreement with a credit provider. For example,
if the credit limit on your personal overdraft is $1000
that means that the bank has agreed to let you carry a
debt of up to $1000 on the bank account that the overdraft
is attached to. |
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| Records
showing a history of how individuals have mismanaged their
debts and repayments (sometimes called a 'credit history'
or 'credit file'). Credit reports are kept and maintained
by credit agencies, and may be accessed by banks and financial
institutions if the individual has made an application
for a loan or credit card. Credit reports only contain
records of negative events, so, if an individual has always
paid bills on time and has never defaulted on loan or
credit repayments, they will not have a credit report
at all. See also definition of Credit file. |
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| A
co-operative organisation that may provide credit to its
members. |
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| An
amount of money that is owed to another party. |
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| Interest
is the amount a borrower pays to a lender for the use
of the lender's money. For example, if money is borrowed
from a bank in the form of a loan, the bank will charge
interest for the use of that money. |
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| The
business that provides the credit in a credit contract
and is therefore owed the money. The lender is sometimes
also called the 'creditor' or 'credit provider'. For example,
a lender can be a bank that lends money in the form of
loans, or a department store that lends money in the form
of store cards. |
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| This
is the right of a trader to retain goods until an account
is paid. For example, a car repairer can retain the vehicle
until the owner pays for the repairs that were made. |
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| The
minimum amount to be paid off a credit statement or loan. |
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| Payday
lenders offer small, short-term loans between paydays.
They can seem like an attractive option to people who
have been unable to obtain credit through a mainstream
credit provider, but the loans can often come with exceptionally
high interest rates. |
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| Per
annum essentially means 'by the year'. Interest rates,
for example, are usually calculated by the year. So, if
the interest rate on a personal loan is 8% per annum,
it means the borrower must pay 8% in interest each year.
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| This
is the method used by a pawnbroker, who provides money
in return for valuable goods which they hold until the
loan is repaid. A fee is usually charged on this type
of loan. |
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| A
form of credit where you are required to provide an asset
(such as a car) as security for the loan. In the event
that you fail to pay back the loan, the lender can potentially
claim that asset as full or part payment for the loan
amount outstanding. Home loans and some personal loans
are secured forms of credit, as are some personal overdrafts. |
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| A
record summarising all the transactions of your account
and any fees charged or interest paid over a given period.
How frequently you receive statements can depend on the
type of credit and the credit provider. For example, credit
card statements are usually sent monthly, whereas statements
on personal loans may be sent every three months. |
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| A
form of credit card offered by some stores and retail
groups. |
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| Any
form of credit where you do not have to provide an asset
as security against the loan. Credit cards, store cards
and some personal loans and overdrafts are usually unsecured
forms of credit. Note that unsecured forms of credit usually
have higher interest rates than secured forms of credit. |
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