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Interest-only loans could lead to "debt trap"

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Australian Broker | 03 Nov 2016, 07:00 AM Agree 0
Amid several risky trends around interest-only loans, should brokers or borrowers initiate the responsible lending conversation?
  • unqiuebdz | 03 Nov 2016, 08:32 AM Agree 0
    This is a key factor of responsible lending. Discussing with your customers the risks and costs associated with a product not just the features and benefits.
    A risk of interest only is value of property not increasing, no principle having been paid off and customers needing to sell quickly.
  • Really? | 03 Nov 2016, 08:44 AM Agree 0
    Sick of so called experts - who aren't involved in lending - telling me what I'm doing or not doing.
    People trying to create an industry where an industry doesn't exist.
  • Joker | 03 Nov 2016, 12:37 PM Agree 0
    Retard expert,You guys fking know there is offset account ?

    You tell me who is not able to repay their loan with offset account have all the money?

    So the most secure thing people do is renting ?

  • | 03 Nov 2016, 03:08 PM Agree 0
    Is this guy Martin employed by the Banks or APRA itself ? Give us Statistics showing the default rate amongst those who have had Interest only loans (for Investment) as opposed to Owner Occupier. Why manufacture something that isn't there and sweep it under the broad guise of 'responsible lending'. Only 20% would prob be able to lend if APRA's 'guidelines' strictly adhered too. Note these are guidelines. Brokers are mostly not Tax Advisors who advocate this practice. We can certainly have a conversation with client and always recommend Advice from a Financial Planner or Accountant
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