A Medium Amount Credit Contract (MAAC) loan is a type of short-term loan product for amounts between $2001 and $5000, repaid over a duration that is between 16 days and 24 months, and is regulated under the National Consumer Credit Protection Act since 2009.
They differ from payday loans, as they are for higher loan amounts and can be repaid over longer periods, as opposed to being smaller loan amounts that are repaid within one or more pay cycles.
Updated by Steve Stemp on 18/4/23
Reasons for a MAAC loan
MAAC loans are generally used to meet larger expenses such as replacing whitegoods, car purchases,
rental bonds, dental expenses, unexpected travel, etc.
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.
MAAC Loan Fees & Charges
With any type of credit, it is important to remember that there are fees and charges attached to the product and it is important to compare different loan products to determine which product works best for you.
MAAC loans may have:
- An establishment fee
- An ongoing monthly fee
- Interest charged
- Late payment fees
The total amount of fees and charges on loans over $2000 is not allowed not exceed 48%.
Government regulation requires that your loan provider carry out “responsible lending obligations” to ensure you can afford the loan you are asking for.
Your loan provider will complete a financial assessment to confirm that you have sufficient disposable income to service your MACC loan. Different loan providers may have different ways of assessing your ability to repay the loan you are applying for.
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 you own, such as a vehicle, 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 payout the loan, you are liable for the shortfall.
As long as you pay out your loan completely as per the terms of the loan contract, providing an asset to secure a loan can have advantages in securing a better interest rate.
By law, lenders cannot take security over home assets such as beds and essential whitegoods such as a fridge or washing machine.
If you have taken out a MACC loan and are experiencing financial problems in meeting your loan commitments, it is best practice to immediately contact your loan provider. This should assist in avoiding any penalties and added fees.
Your loan provider will most likely agree to a change your loan repayment schedule or amount under its financial-hardship responsibility to you. This is the case whether your MACC loan is secured or unsecured.