Glossary
Regulated loan
Also called: consumer credit, regulated credit
A regulated loan is credit provided to an individual or strata corporation wholly or predominantly for personal, domestic or household purposes, or to buy or improve residential investment property, where the lender charges for credit. It is covered by consumer credit law.
An example
A person borrowing to renovate their own home is likely to be entering a regulated loan, while a company borrowing to fund its trading business generally is not.
Why it matters
Regulated loans come with responsible lending obligations and access to hardship and complaint processes. Lenders will ask about the purpose of a loan to determine whether it is regulated.
Points to check
Ask the lender how it classifies your loan and why. Regulated loans come with protections under consumer credit law, including responsible lending, disclosure and hardship rights. Loans for business purposes are generally not regulated, even if secured on a home. If you are unsure, get advice before signing, and read ASIC's MoneySmart guidance on consumer credit.
Read about low-doc and non-conforming loans
Related terms
Further reading: ASIC Moneysmart