Credit contract

Know who you're dealing with

Reading a contract can seem too hard (or too boring), but don't avoid it or put it off. It's essential to know what you're signing up for before you go ahead with a credit card, loan or consumer lease. You also need to know who you're getting the credit from and how they are charging you.

How to check a credit contract

Before you sign a contract for a credit card, loan or lease, check the following:

  • The name of the business or person lending you the money or leasing you the goods
  • Details of the loan or consumer lease, including the need for you to offer an asset as security
  • How interest is calculated and charged
  • Fees and charges and any commissions and insurance premiums
  • What happens if you can't meet your repayments - will you be charged a higher rate of interest or extra fees?
  • If and when you'll receive account statements and how you will be told of any changes to the terms and conditions of the contract

Case study: Marianna gets a better deal

lady at laptopMarianna is looking for a personal loan to help pay off her kitchen renovations. To make sure she gets a good deal, she checks the comparison rate for her top two loan choices. However, she knows that the comparison rate does not include certain charges, such as early termination fees.

To find out all the fees she has to pay, Marianna reads the credit contracts of the two loans. She finds out that Loan A charges a higher fee than Loan B if she pays off her loan early. Marianna decides that Loan B is a better option for her.

Check if your credit provider is licensed

Credit providers and brokers that are not licensed are operating illegally in Australia. Make sure you only deal with a company or person who is licensed.

Search ASIC Connect's Professional Registers to check your credit provider has been licensed or you can phone ASIC's Infoline on 1300 300 630.

Find out more about the law and consumer credit regulation.

Do you need consumer credit insurance?

Consumer credit insurance covers you if you can't meet the repayments on your credit contract or loan because you are out of work, sick or injured. The benefits, limitations and costs of this insurance can vary - and the cover offered by the credit provider might not be the cheapest you can get.

Smart tip

You can ask that consumer credit insurance be removed from your contract before you sign it.

Check if consumer credit insurance is included in a credit contract before you sign. Some credit providers include it and others don't. You can't be forced to have this insurance and in many cases you may not need it.

For more information, take a look at our consumer credit insurance page.


Your credit contract will give you the information you need to decide if the deal is worth it. If you don't understand something in the contract, ask your credit provider. It's better to be safe than sorry when it comes to borrowing money.

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Last updated: 02 May 2019