I didn’t think it would be like this…

In November 2020, Jackie and her son Marco purchased a car for $29,000. They borrowed the money for the car from a car finance lender.

The salesperson at the dealership filled out the loan application for Jackie and Marco. They provided some payslips and bank statements, and the lender approved the loan. The total amount borrowed was $32,000 including some fees and add-on products including breakdown insurance.

The lender assessed the risk of the loan and decided an interest rate of 23.95% per annum would be reasonable. Jackie and Marco accepted this interest rate. The loan repayments were $242 a week.

Over the summer holiday period in 2020, Jacki and Marco accepted an offer from the lender to defer payments and to start paying again on 2 February 2021. Jackie and Marco made all their further repayments. By June 2023, Jackie and Marco’s loan balance was $19,900.

Although Jackie and Marco had made all their weekly loan payments, and they had never fallen into a position of hardship, they felt as though the weekly repayment amount, and the interest rate, were too high. Jackie and Marco complained to FSCL.


Jackie and Marco said that the loan terms were unreasonable. Although they could afford the weekly repayments, and they’d never missed a repayment, they said that a $242 weekly repayment was too high. They also said the interest rate should have been lower, and not based on Marco only having a learner’s licence. Jackie and Marco were also under the impression that the weekly repayment amount would reduce over time.

The lender said that the interest rate they applied to the loan was accounting for the risk associated with their loan and was reasonable given the risk. The lender also said that the fact that Marco was on his learner’s licence had little impact on the interest rate applied to the loan.


We noted that Jackie and Marco had signed a disclosure statement setting out the loan amount, and the interest and fees that would apply to the loan.

We explained to Jackie and Marco that the lender was entitled to set the interest rate depending on the level of risk associated with the loan. We also explained that an interest rate of 23.95% per annum was not an unusual rate for lending of this nature. In any event, under our rules, we were unable to consider a complaint about the level of a standard interest rate.

We found that the loan did not have a structure where loan payments would reduce over time; the $242 weekly repayment was a fixed amount.

We also explained to Jackie and Marco that the lender had correctly calculated the loan term, and that it likely felt longer than expected due to them agreeing to defer payments for a time between December 2020 and February 2021.

We suggested that Jackie and Marco discontinue their complaint, which they did.

Insights for consumers

Sometimes the information in loan agreements can be wordy and confusing. Consumers should make sure that they are fully aware of the nature of the loan they are signing.

If you are unsure about any part of a loan agreement, you should let the lender know so that they can provide further clarification.

Also, where a loan has a fixed interest rate for the full term, the loan payments do not usually reduce over time.