Login
1-Jul
0Likes

Loan Type-SACC vs MACC

Cash Advance, Cash Loans, Fast Cash Advance, Online Cash Loans, Personal Loans, Quick Cash Loans, Short Term Loans by

There are many loan types for consumers such as secured, unsecured, lines of credit, home loans, etc. However, the majority of consumers opt for one of two options: known as short-term or personal loans. These are SACCs (Small Amount Credit Contract) and MACCs (Medium Amount Credit Contract).

What is a SACC loan?

A SACC loan is a regulated product under the National Consumer Credit Protection Act, which was introduced in 2009. A SACC loan varies in length from 16 days to 1 year, up to $2,000. The fees associated with a SACC loan will typically entail a 20% establishment fee and a 4% monthly fee depending on the amount and duration of the loan term.

These loans are designed to help meet unexpected expenses and are a convenient and economical way to manage a temporary cash flow problem, such as an unexpected car repair bill, household repairs or several different unforeseen expenses that happen in everyday lives. It is important to remember that these loans are only for short-term pitfalls and are not suited for long-term or ongoing financial needs.

Government regulation requires that your loan provider must carry out “responsible lending obligations” to ensure that you can afford the loan you are asking for. Lenders should not lend without first confirming you have sufficient disposable income to service your loan amount over a time frame that meets your specific requirements. Different lenders have different ways of carrying out these checks when you apply for a loan.

All SACC loans are unsecured, which means that you don’t have to pledge any asset that you own such as a vehicle or your home to take out the loan.

If you are experiencing problems in meeting your loan responsibilities, your loan provider will most likely agree to change your loan repayments under its financial-hardship responsibility to you. It is best to contact your loan provider as soon as you start experiencing problems to ensure you do not incur any other charges such as late payment fees. If you have ongoing problems meeting your financial needs or debt obligations, you should first talk to your loan provider. Please remember, that a SACC loan should be seen as a “one-off” loan for an urgent, and should not be used continuously as a source of credit.

What is a MACC loan?

MACC loans vary in length from 16 days to 2 years and can be from $2,001 to $5,000. These loans are generally used to meet larger expenses such as replacing white goods, car purchases, rental bonds, doctor’s expenses, unexpected or emergency travel, etc.

Your MACC loan provider must carry out their “responsible lending obligations” to ensure that you can afford the loan and the repayment timeframe. Different loan providers may have different ways of assessing your ability to repay the loan you are applying for.

Some customers prefer to use a MACC loan rather than a bank credit card or a personal loan for a similar amount through a bank or building society. With any type of credit, it is important to remember that there are fees and charges attached to the product and this may make the product more suitable for an emergency.

MACC loans can be Secured or Unsecured

“Unsecured” means that you don’t have to pledge an asset as security to take out the loan. “Secured” means that you must pledge an asset that you own, such as a vehicle or a home, to take out the loan. If you fail to pay the loan out, the lender is entitled by law, to repossess your asset as payment towards the unpaid loan amount. If the sale of your loan security does not pay out the loan, you are liable for the shortfall. If you pay out your loan completely as per the terms of the loan contract, then there is no problem with a secured loan. By law, lenders cannot take security of home assets such as beds and essential white goods such as a fridge or washing machine.

Please consider before taking out a MACC loan that moving forward you will be able to meet your loan commitments, your loan provider will most likely agree to a change in your loan repayments schedule or amount under its financial-hardship responsibility to you. This is the case whether your MACC loan is secured or unsecured. It is best to contact your loan provider as soon as you start experiencing problems to ensure you don’t incur any other charges such as late payment fees.

 

Tags:


Links

Policies

Loans

Loans

*Disclaimer & Example: For our Small Loans of $2,000 or less, an APR (Annual Percentage Rate) doesn't apply. These loans are fee-based only with a term between 62 and 180 days, and so the APR is 0%. The establishment fee is 20% of the amount borrowed and the monthly fee is 4% of the amount borrowed. Representative example: a loan of $1,000 repaid over 3 months equates to a total amount payable of $1,320 comprised of $1,000 principal (amount borrowed), $200 establishment fee and $120 in monthly fees. The maximum comparison rate on loans between $300 and $2000 is 199.43%.
For our Medium Loans between $2,100 and $5,000, with a term between 2 months and 12 months, the maximum Annual Percentage Rate (APR) is 48% (Comparison rate 65.6597% p.a.) and there is a $400 Establishment Fee. A Medium Loan of $3,000 borrowed over 1 year would equate to a total amount payable of $4,289 (including a $400 establishment fee).

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR %). The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

© 2023 Owned by Australian Synergy Finance Pty Ltd, ABN 54 613 655 646. Australian Credit Licence 490422. The information on this webpage is general information only and does not take into account your objectives, financial situation or needs.