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How to spot a dodgy home loan

How to spot a dodgy home loan

Dodgy deals, misleading ads, and fake companies are just some of the landmines in the home loans market. To keep yourself safe from stress and scandals, here are some common symptoms of bad lending for the savvy borrower.

The most common mistake that borrowers make is not reading the fine print of an advertisement or product. This may include expiry dates of deals, which type of customers qualify, and hidden fees or charges that apply. Before you make a big decision, such as signing a home loan, comb through product disclosure statements so you know exactly what you’re getting into.


Lenders have several methods and jargon for advertising fees, and in many cases, not all of the fees will be revealed until you’re about to sign the loan. For example, if a borrower advertises “no annual fees”, you should clarify that there are no monthly fees either.

Advertisements can also exclude certain terms, such as requiring you to combine your home loan with the lender’s insurance policies in order to qualify for discounts.


Recently, two fake companies have been discovered after consumers lost hundreds of dollars in loan application fees. Ezy Savings and Caveat Loans IT Strong have been making unsolicited calls to potential customers, often using deceptive sales methods to entice them into sending cash over the phone, according to the Australian Securities and Investment Commission (ASIC).

Warning signals should be flying whenever you receive calls from unknown sources. Ones requesting credit card or account details should be taken even more cautiously, unless they can be verified.

To avoid traps like these, confirm that the lender is operating with an ASIC license before providing your personal details.


Every product will have pros and cons. Your job will likely be to find out the cons when a home loan advertises itself as the one with the lowest fees or best features, because chances are, it won’t be a winner in every department.

Know the market

Many lenders will advertise their rates as the lowest amongst competitors. While this can be true, it may not be the case in a week or a month’s time. To keep up to date with rate trends and make sure you get the best deal in Australia, compare home loans online regularly to get a feel of the landscape.

If you have been a victim of fraud, misconduct, or believe that a lender is behaving unethically, contact ASIC at www.asic.gov.au to protect yourself and your family from damage and distress.

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