Business Loans Australia :: Articles

Personal Loans And The Consumer Credit Code

What should I know about personal loans and the Consumer Credit Code?

Personal Loans And The Consumer Credit Code
Understanding your rights as a consumer is essential in dealing with complex issues like personal loans and other finance. Here we reveal, in simple terms, how the Credit Code works for you.

Introduction of Credit Code

The Consumer Credit Code commenced operation on November 1, 1996.
This is a national code that is applicable in each State.
Despite what its title suggests, it is not a code of conduct but legislation that is enforceable in certain situations where credit is offered. 
Any non-business credit transactions are governed by the Code if entered into after that date, including continuing contracts that were in force at that date.
This includes:
  • credit provided predominantly for domestic, personal or household purposes;
  • where a charge is made for the credit; and
  • Insuring your most valuable asset
    Image for Insuring your most valuable assetWhile many people would consider their home or their car to be their most valuable asset, it's your ability to earn an income that is most important in shaping your financial future. Statistically, two thirds of working Australians will suffer an injury or illness that will sideline them for 90 days or more. The majority of these people would not be able to pay their mortgage or meet car finance and other loan commitments without adequate income insurance.
    credit is provided in the course of a business of providing credit, or incidental to any other business of the credit provider. Definition of credit contract The Consumer Credit Code covers a wide range of credit contracts, which is defined as:
  • the payment of a debt owed by one person to another is deferred; or
  • one person incurs a deferred debt to another. Different categories of credit under the Consumer Credit Code include:
  • instalment contracts;
  • consumer leases;
  • continuing credit.

The Consumer Credit Code covers credit contracts entered into after November 1, 1996 including:

  • all consumer credit e.g. credit cards, housing etc loans that are characterised as being domestic, personal or household - not for business purposes;
  • in all Australian jurisdictions;
  • where charges are made for the credit;
  • where the credit provider does so in the course of business.

Personal, domestic & household purposes

The Consumer Credit Code does not apply for business purposes. 

According to the Code the nature of the credit does not have to be wholly concerned with domestic credit, but will be caught by the provisions of the Consumer Credit Code if:
  • more than half the credit is for personal, domestic & household purposes; or
  • if the credit is to purchase goods that are to be used for different purposes, then the purpose is mostly for personal, domestic & household purposes.

Goods mortgages

Mortgages are a security over goods (sometimes called "chattels") or real property. 

This means that the lender has the right to take the property/goods and sell it if the borrower defaults on the loan. 
There are certain requirements that must be met before the mortgage comes under the Consumer Credit Code, including that the goods or land must be specifically described.

Applicable credit providers

For a credit contract to be covered by the Consumer Credit Code, the credit provider must supply the credit:

  • in the course of a business that provides credit; or
  • where it is incidental to any other business of the credit provider.

There is no hard and fast way to determine this, but it can be important where the seller simply allows the buyer to pay for the goods in instalments, or when a family member offers a loan. 

In the first case the contract would probably be covered by the Consumer Credit Code; in the latter case it would not be covered.

Exclusions from the Consumer Credit Code

This can be complicated, and it is always worth asking whether the contract is covered by the Consumer Credit Code. There are many situations where the Consumer Credit Code will not apply, including:

  • short term credit;
  • where credit provision occurs without contemplation e.g. a savings account goes into debit;
  • within certain limits, where the only charges are periodic or fixed and not changed according to the level of credit that is provided e.g. an annual fee to a credit card provider or a arrangement with a supplier that allows goods to be bought on account and a fixed charge is applied;
  • insurance premiums payable on instalment;
  • most pawnbroker transactions;
  • employee loans.

Credit Code & guarantees

A guarantee must be:

  • in writing;
  • signed by the guarantor;

A copy of the credit contract must be received by the guarantor. 

They must also receive a copy of a document that sets out the obligations of the guarantor under the contract.

Published: Sunday, 1st Aug 2021
Author: Paige Estritori


Business Loans Articles

Alternative Funding Options for Your Australian Business
Alternative Funding Options for Your Australian Business
When it comes to starting or expanding a business in Australia, securing funding is often a top priority. However, traditional funding options, such as bank loans or government grants, can be difficult to obtain for small businesses. - read more
Understanding Loan Terms and Conditions: A Guide for New Business Owners
Understanding Loan Terms and Conditions: A Guide for New Business Owners
Starting a business often requires a substantial amount of capital, which many new business owners may not have readily available. Business loans can provide the necessary funding to help get your startup off the ground, from purchasing equipment to hiring staff and everything in between. - read more
The Ultimate Checklist for Applying for a Business Loan in Australia
The Ultimate Checklist for Applying for a Business Loan in Australia
Welcome to the world of boating! Whether you've just bought your first boat or are considering making a purchase, it's essential to understand the importance of regular maintenance. Proper upkeep not only extends the life of your boat but also ensures safety while out on the water. - read more
Mastering Cash Flow: Essential Tips for Expanding Your Business's Working Capital
Mastering Cash Flow: Essential Tips for Expanding Your Business's Working Capital
Cash flow is the lifeblood of any business, signifying the money that flows in and out of your operations. It's essential for covering daily expenses, paying employees, and capitalizing on growth opportunities. Maintaining a healthy cash flow ensures that a business can meet its obligations and invest in its future. - read more
Breaking Down Barriers: How to Overcome Delays in Business Loan Approvals
Breaking Down Barriers: How to Overcome Delays in Business Loan Approvals
Embarking on a business endeavor often requires substantial financial support, and securing a business loan can be a crucial step towards progress and expansion. A well-prepared loan application not only showcases your business in its best light but also significantly enhances the prospects of obtaining the needed funds. Attention to detail and a thorough understanding of the lending process can streamline your journey to approval. - read more
Customized Leasing Solutions: Finding the Right Terms for Your Business Needs
Customized Leasing Solutions: Finding the Right Terms for Your Business Needs
Equipment leasing presents a strategic financial opportunity for Australian businesses seeking to maximize operational efficiency without the hefty price tag of purchasing. As many companies strive to stay competitive and agile in a bustling economic landscape, the importance of flexible asset acquisition cannot be understated. - read more
The Role of Refinancing in Sustaining Business Growth
The Role of Refinancing in Sustaining Business Growth
Loan refinancing is a financial strategy where existing debts are replaced with new ones, usually with different terms and conditions. While it might seem like just swapping one loan for another, the nuances can be game-changers for businesses. Refinancing often provides a chance to improve borrowing conditions, such as reducing interest rates, altering loan durations, or switching to a more favourable lender. - read more

Finance News

Australian Business Lending Surges 9.2% in June 2025
Australian Business Lending Surges 9.2% in June 2025
27 Sep 2025: Paige Estritori
In June 2025, Australia's business lending landscape experienced a significant upswing, with loans to non-financial businesses reaching $1.14 trillion—a 9.2% increase compared to the same month in 2024. This growth rate notably outpaced the 5.6% year-on-year rise in housing loans, which totaled $2.34 trillion. The widening gap between business and housing loan growth, now the largest since September 2022, underscores a renewed appetite for corporate borrowing. - read more
Non-Bank Lenders Fill Void as Traditional Banks Tighten Credit
Non-Bank Lenders Fill Void as Traditional Banks Tighten Credit
27 Sep 2025: Paige Estritori
The Australian financial landscape is witnessing a significant shift as non-bank lenders rapidly expand to meet the financing needs of businesses, particularly small and medium-sized enterprises (SMEs). This growth comes in response to traditional banks tightening their lending criteria, leaving many businesses seeking alternative funding sources. - read more
Private Lending Growth Opens Doors and Risks for Brokers
Private Lending Growth Opens Doors and Risks for Brokers
27 Sep 2025: Paige Estritori
The private lending sector in Australia is experiencing unprecedented growth, presenting both opportunities and challenges for brokers navigating this evolving landscape. As traditional banks tighten lending criteria, brokers are increasingly turning to private lenders to meet the diverse financing needs of their clients. - read more

Need Help Finding a Loan?
Loan Amount:
Postcode:
All finance quotes are provided free (via our secure server) and without obligation.
We respect your privacy.

Knowledgebase
Amortization:
The process of gradually paying off a debt over a period of time through regular payments.