Small Business Loans News

Tricky lenders fooling borrowers
AFTER the latest interest rate rise, potential borrowers are being warned about some of the tricks used by some lenders to win business. Some lenders regularly delayed their rate increases by a month or so, leading borrowers to think they were getting a better deal. However, because of the time it takes to finalise a loan, by the time the loan is ready to be settled, the lender's rate had moved up. Even though a lender intends to increase their rate, they are not required to advertise it in the headline or comparison rate until they actually change the rate. Borrowers usually find out too late and are locked in by heavy exit penalties. Unlike variable loans, fixed rates are not subject to decisions by the Reserve Bank, and rise and fall at the whim of the lender.

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