Credit and Loan Assessment Policy Summary

As with any finance related product the major risk is defaults by the Borrower.

We are very confident that the Mini D target market default rate will be very minimal (if any) given our strict credit assessment and loan product policies.

Our credit policy and assessment process are built around the old time tested and well proven
5 C’s of Credit:- Character, Capacity, Capital, Collateral and Conditions.

Character – refers to the Borrower’s credit history and financial responsibility profile. As part of processing any loan we have access to credit reports, bank statements, income verification, asset and liability position, rental history etc and believe we can verify the Borrower’s character very well. As a double check however, and because the Borrower’s primary loan is through a traditional lender all loan assessment information is doubled checked and confirmed by an independent third party.

Capacity – refers to the Borrower’s ability to repay the loan. Given our target market, the majority of Borrowers have a university degree or similar educational qualification, and enjoy high disposable income, very strong employment prospects and usually employed with a government fortnightly paycheck.

Capital – refers to the equity or deposit the Borrower is contributing. This is Mini D Loans greatest marketing strengths because it addresses the major roadblock to home ownership. Although the Borrower has limited equity or deposit on paper, they are very strong in the other 5 C’s. Their equity will build up over time given the Mini D Loan product is designed to assist for the purchase of an appreciating property asset rather than the traditional personal loans which are predominantly utilised for leisure or depreciating assets.

Collateral – refers to security that is being offered. Mini D will as part of the loan process and were suitable will hold either a registered or registerable mortgage supported with a caveat or GSA. However again given the nature of the Mini D Loan we effectively hold a personal guarantee by the Borrower’s and given the Borrowers above character, capacity, and job status, we anticipate defaults to be minimal if any and can be actively managed out with refinancing or loan restructuring.

Conditions – refers to what loan terms and conditions should be applied to a loan given the overall risk profile of the Borrowers and the economic financial conditions at the time of application. How long have they been employed, is their employment stable, is their industry considered sustainable, what is the loan purpose etc.
With all the above considered in context with the Borrower’s financial information supplied we can assess the overall credit risk profile of the Borrower and tailor a Mini D Loan with the appropriate interest rate, loan terms, pre settlement and post settlement conditions as required. 

In addition to the above, we also have a unique Borrower early warning system built into our loan management. As finance brokers of the primary loan, were notified via backchannel messaging should any of our loans written have any loan discrepancies, late repayments, or loan discharge requests etc. This allows us ample time to address any Mini D Loan issue early with our Borrowers and contain any possible loan default scenario.

It would come as no surprise to anyone that from an industry statistical perspective the 3 highest personal loan defaults are:

1. Males in their early 20’s, non- homeowners who obtain personal loans for cars, boats, and motor bikes.
2. People who are non-homeowners who obtain personal loans for weddings and holidays.
3. People who are non-homeowners who obtain personal loans for medical procedures or cosmetic surgery.

Mini D Loans do neither of the above or indeed any of the other high risk personal loans profiles. 

The Mini D Loan is a uniquely targeted personal loan product unlike any traditional personal loan in the consumer market today. Mini D Loans will only be utilised to assist new home buyers as follows:

1. A direct top up loan for a client’s deposit.
2. A consolidation loan of other debts to improve clients home loan serviceability.
3. A combination of both 1 & 2