Borrowing is set to boom, but what happens when the bubble bursts?
  • Changes to lending laws, brought in to free up credit and stimulate the Australian economy, are set to trigger a lending boom
  • Essentially, the changes simplify the loan application process, meaning there's less information credit hopefuls are required to hand over when they tap the banks for fresh funds
  • Borrowing was on the rise down under even before the lending criteria was relaxed — In July, the Australian Bureau of Statistics (ABS) reported the sharpest-ever monthly spike in home loan lending
  • But amid a wave of new applications, deferrals are also on the rise, leading some to question whether the boom is sustainable.
  • So, what's in store if the lending bubble bursts, and how will it impact the ASX-listed credit managers?

Changes to lending laws, brought in to free up credit and stimulate the Australian economy, are set to trigger a lending boom.

The modifications, announced by Federal Treasurer Josh Frydenburg last Friday, will make it easier for Australians to apply for a home or personal loan.

It comes as statistical bodies reported a sharp rise in loan applications over the winter months as COVID-19 restrictions began to ease. But amid a wave of new applications, deferrals are also on the rise, leading some to question whether the boom is sustainable.

So, what's in store if the lending bubble bursts, and how will it impact the ASX-listed credit managers?

Read the full article on The Market Herald here: https://themarketherald.com.au/borrowing-is-set-to-boom-but-what-happens-when-the-bubble-bursts-2020-09-28/