Now, rest assured that you don’t actually have to say goodbye to Netflix to take out a loan. It’s just a “non-essential” expenses example ASIC has provided in its updated Regulatory Guide 209 (RG 209) to provide greater clarity and support to lenders and brokers.
In one of the 39 guidance examples in the updated guide, a prospective borrower named Leah “advises her lender that she could cancel her monthly streaming services” to cover the monthly repayment of a proposed smaller loan.
Rough. We know. Apparently Leah didn’t even get to finish the latest season of The Crown.
But rest assured that if (unlike Leah) you can’t live without your fix of Netflix there’s scope for other non-essential expenses to be cut instead – if you need to make cuts at all (it depends on your financial situation).
“Examples in this guide are purely for illustration; they are not exhaustive and are not intended to impose or imply particular rules or requirements,” ASIC explains in the principles-based guide which it says allows for “flexibility to determine what is appropriate in individual circumstances”.
ASIC has also included a section that confirms small business lending is not subject to responsible lending obligations, irrespective of the nature of the security used for the loan.
Absolutely. There’s an interesting section in the updated guidance where ASIC states:
“We recognise that a consumer may be able to reduce their spending and change their lifestyle in order to afford a particular loan and be able to do so without substantial hardship.”
And a related section that states: “There may be some lifestyle changes the consumer would not be prepared to make to afford credit.”
So come in for a chat. We can discuss with you what your essential expenses and your non-essential expenses are, and how they may impact your credit application.
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