How to manage loans and credit
Learn about borrowing and credit to help manage your money.
Things to think about
Spending money you don’t have can be expensive. There are things you need to think about when taking out a loan or using credit. You should ask yourself if:
- it’s something you really need right now or if you can save up and buy it in full later
- it’ll make your budgeting tight and will be hard to cover bills like rent or food
- paying it will stop you from saving or having money for emergencies
- there are other ways to get or pay for what you want.
There’s safe and affordable finance out there. Check if you can get no interest or low interest loans from Good Shepherd Microfinance.
Before applying for a loan or credit, use the Australian Securities & Investments Commission’s (ASIC) MoneySmart simple money manager. It can help you work out your budget.
If you do apply for a loan or credit, always check the terms and conditions. There will be things lenders won’t tell you up front. Don’t sign a contract if you still have questions.
Think about talking to someone before you take out a loan or credit. You can also find out about free legal advice on the MoneySmart website.
Types of loans and credit
There are many types of loans and credit with different fees, charges and interest rates.
Visit the MoneySmart website for advice about:
- pay day loans, that can have high fees and charges
- how credit cards work and how to manage them
- debt agreements, as they may stop you from borrowing in the future
- rent to buy or consumer leases, and use the calculator to compare rent and buying costs
- how buy now, pay later services work
- what to consider when consolidating loans
- the impact of bankruptcy on future borrowing and jobs
- what do when you experience loan rejection on a loan or credit application.
If you get a loan or credit, it’s a good idea to protect yourself. This may mean taking the time to choose the right loan or lender.
There are laws that licensed lenders must follow when lending money to you. Find out more about consumer credit laws on the MoneySmart website.
To check for a licensed credit provider or credit assistance provider, search Connect's Professional Registers on the ASIC website.
If you're unhappy with a lender, find out how to make a complaint on the MoneySmart website. There are external dispute resolution schemes available for complaints about financial services and products.
Be cautious if you get a phone call or an email from a salesperson offering you a loan or credit. It could be a loan scam.
Protect your money by doing some research before you agree to anything. A scam can appear as a great deal but will cost you a lot of money if you’re not careful.
Read more about loan scams on the MoneySmart website, like what to be careful of.
Tips and tricks
Also see our free and confidential Financial Information Service to inform and educate you on financial matters.
If you’re having trouble paying a bill, loan or mortgage, speak to your bank or service provider. Most will have a hardship team who can help. They may be able to delay, reduce or waive debt repayments depending on your situation.
It’s worth getting free expert advice to get a clear picture of your finances. For help in your area find a financial counsellor on the National Debt Helpline website.
If you’re a farmer or small rural business you can speak to a financial counsellor. Read about the Rural Financial Counselling Service on the Department of Agriculture and Water Resources website.
Page last updated: 16 August 2019