A licence that businesses must hold to legally provide financial product advice, deal in financial products, or operate managed investment schemes.

The process of gradually decreasing the amount of debt by regularly meeting repayments over time. This process can also be referred to as the depreciation of debt.

A fee charged by your creditor for use of the account or service. An annual fee is associated most commonly with the use of credit cards.

The interest charged on your debt, expressed as a 12-month rate. A useful metric to use when comparing long-term credit borrowing. For short-term loans, the APR will seem high, and you are advised to compare the overall cost of borrowing rather than the APR.

APRA oversees banks, insurers, and superannuation funds to ensure financial system stability.

A super fund regulated by APRA (as opposed to an SMSF, which is regulated by the ATO).

The cost of submitting an application for credit. An application fee is more commonly seen for home loans and not typically charged on smaller loan amounts.

An educated estimate on the value of a property or possession. An appraisal of your assets will be done on all secured lending.

A possession or property owned by the customer that has cash value. Assets are used as collateral in secured lending. Assets usually accepted by lenders include vehicles or property.

ATO handles taxes, superannuation (for individuals), and SMSFs.

Anyone you have approved to use your line of credit. Often with credit cards, an authorized user will have access to the credit line and/or credit card with their name on it under the same account.

The process of moving all or some of an outstanding balance from one credit card on to another.

A legal proceeding that excuses a person from repaying all or part of their existing debts due to being unable to meet repayments and experiencing over-indebtedness. Bankruptcy should be viewed as your last option and it will have detrimental effects on your credit score and your likelihood of being accepted for a line of credit in the future.

A person who receives funds or benefits from a will, trust, insurance policy, or superannuation fund.

The person requesting the loan and responsible for repayments.

The person issued the credit card and/or authorised users.

A cash loan requested from your creditor through an ATM or use of a paycheck. Usually offered as a line of credit on credit cards that comes with a unique set of charges.

A transaction reversal initiated by a cardholder’s bank due to disputes or fraud.

Asset or property used as security against a loan. The lender will take control and ownership of the collateral if the loan is not repaid.

A creditor may sell your debt book to a collections agency to recuperate a proportion of the amount owed. A collections record will remain on your credit report for a number of years.

A company that collects information relating to the credit ratings of individuals and makes it available to lenders and credit card issuers. The main credit bureaus in Australia include; Veda Advantage, Tasmanian Collection Service, Dunn & Bradstreet and Experian.

Businesses or individuals who provide consumer credit must hold an Australian Credit Licence (ACL), regulated by ASIC.

The maximum amount of credit a lender extends to a borrower.

A record of consumer financial behaviour that is kept on an individual by a credit bureau. The credit report will include the following information; full name, age, residential address history, employment history, loan and credit behaviour history including default repayments and bankruptcy filings.

Companies like Equifax or illion that collect and share consumer credit info—regulated by the Privacy Act under guidance from ASIC and OAIC.

A number formulated from an individual’s credit report by the credit bureau that provides a high-level evaluation of the credit risk of the borrower (whether you a likely to meet repayments). A credit score ranges from 300 -1200, with a good credit rating being 700+

An amount of money owed by the borrower.

The process of combining all existing debts into one repayment plan. The process can be done individually (e.g. taking out a personal loan to consolidate your credit card debt) or through the use of a debt counsellor.

A professional service offered by licensed debt counselling agencies who negotiate new repayment terms over a longer period of time with your creditors to reduce your monthly payment amount and make your debt more manageable. A debt counselling agency can also negotiate a debt settlement with your creditor in extreme cases, meaning the amount of your debt is reduced.

Expenses you can legally subtract from your taxable income—critical for workers, investors, and small businesses.

A status of a debit account that indicates the debt has not been repaid. A loan account will go into ‘default’ if a repayment is missed.

Laws requiring financial product issuers to define a target market and ensure products are distributed appropriately.

The difference between the current value of an asset (like a house) and any debts owed on it.

Regulated under ASIC rules—can be general or personal advice and must be delivered by a licensed provider.

The total cost of borrowing. The finance charge includes the interest rate and additional fees that may be applied to the account, such as an establishment fee.

Includes things like superannuation, insurance, shares, and managed funds—legally defined under the Corporations Act.

An interest rate that is fixed in amount for the whole of the loan period.

A tax employers pay on certain non-salary benefits provided to employees.

The period after a payment is due before penalties or interest are charged.

A 10% tax on most goods and services sold in Australia.

A person who agrees to pay a borrower's debt if the borrower defaults.

A credit check that can affect your credit score—often triggered when applying for a loan.

A one-time fee charged by a lender for creating your loan account when you are approved for credit. Short-term lenders, personal lenders and credit card issuers may charge initiation fees.

A loan where the borrower makes the same repayment each month. A personal loan or a car loan can be considered an instalment account.

A proportion of the loan that is charged as interest to the borrower for use of the credit. The interest rate is usually shown as an annual percentage.

A low-interest rate offered for a short period of time by a credit card provider to attract new users.

A contract represented by a policy in which an individual or entity receives financial protection or reimbursement against losses from an insurer. The most common forms of insurance policies are vehicle, health, homeowners and life.

A form of compensation for loss or damages. Indemnity in the legal sense is also commonly referred to as an exemption from liability or damages. The concept is based on a contractual agreement made between two parties.

The failure to make a repayment on a line of credit by the agreed time. A late payment can have detrimental effects on your credit score.

The financial institution that provides the loan to the borrower. Lenders are regulated by the Australian Securities & Investments Commission.

The minimum amount due each month on an outstanding credit card balance.

A monthly fee charged by a creditor provider for managing your credit account. Lenders and credit card issuers can charge monthly service fees.

A strategy where the costs of an investment (usually property) exceed the income it generates, creating a tax-deductible loss.

Earnings after all taxes and deductions (aka take-home pay).

When a bank account doesn't have enough money to cover a transaction or withdrawal.

A savings or transaction account linked to your home loan. The balance offsets your loan principal, reducing interest charged.

An individual can choose to stop receiving pre-approved financial marketing offers and news by ‘opting out’

A fee charged by credit card issuers when the cardholder exceeds the agreed credit limit on the card. The over-limit fee will be agreed prior to issuing the card and is usually charged every billing cycle until the credit amount no longer exceeds the credit limit.

An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero.

The amount still owed on a loan or credit card.

A small, short-term loan with high fees or interest, typically due on your next payday.

A system where employers withhold tax from employee wages throughout the year.

A lump-sum loan repaid in fixed instalments, used for personal expenses.

A fee charged by a lender when a borrower repays the loan prior to the end of the agreed term. Not all lenders will charge a prepayment fee.

The original sum of money borrowed or still owed on a loan, separate from interest.

A document that financial service providers must give you when offering a financial product; outlines key features, fees, and risks.

Rules that require financial institutions to hold enough capital to remain solvent during economic stress.

An estimate of the cost of a financial product or service, such as insurance or a loan.

Set by the Reserve Bank of Australia, but APRA-regulated banks respond by adjusting lending rates.

Taking out a new loan to replace an existing one, often to get a better interest rate.

A home loan feature that allows you to access extra repayments you've made.

A period during which a borrower is allowed to pause repayments, usually due to hardship.

When a secured loan is overdue, the lender may take possession of the asset(s) used as collateral against the loan to recoup the debt amount.

Legal duties placed on lenders to ensure loans are suitable for the borrower, overseen by ASIC.

A credit card that rewards spending on the card with points. The points will accumulate with spending and can be used to claim rewards, air miles or cash back. Reward cards are usually approved to consumers with a good credit score.

A credit card that requires the cardholder to provide collateral on the credit card, usually a cash deposit equal to the line of credit. Secured credit cards are helpful for consumers with poor credit scores that want to rebuild their credit.

A line of credit that requires the borrower to provide collateral as security for the creditor. The collateral is usually seized if the borrower fails to repay the loan.

A type of super fund managed by individuals rather than APRA; regulated by the ATO.

An agreement made with the creditor to repay a debt for less than the amount owed. A settlement will show on a credit report and is only a good option when experiencing over-indebtedness and payments are significantly overdue.

A government tax on certain transactions, like property purchases or car registrations.

Mandatory retirement savings contributed to by employers and sometimes employees.

A legal requirement outlining who a financial product is appropriate for.

A unique identifier issued by the ATO for tax purposes.

A reduction in the amount of tax payable, commonly used in discussions around low-income or senior offsets.

A savings product where money is locked away for a set period at a fixed interest rate.

An everyday account used for deposits and withdrawals, typically via EFTPOS or ATM.

A loan where the lender does not take collateral against the amount borrowed. An unsecured debt will usually have higher interest rates to mitigate the risk of lending for the creditor.

Bills for essential services such as electricity, water, or gas—sometimes used in ID checks or credit assessments.

An interest rate that can change over time, affecting your repayment amounts.

A global payments network—relevant for comparing credit card options (Visa vs Mastercard).

A voluntary surrender of a right, claim, or privilege—common in insurance or loan fees.

The maximum amount you can withdraw from an account in a set time period.

The earnings from an investment, typically expressed as a percentage.

A loan that does not charge interest for a certain period—used by some retailers or community organisations.