If you use Afterpay, your bank might reject your home loan application, page-12

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bgtaylo

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17/12/19

08:04

Post #: 42001256
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Originally posted by Revro: ↑

This is an old article and clearly a bias slant against AfterPay.

Notice the headline calls out AfterPay, not BNPL, but AfterPay.

Imagine, "If you drive Toyota you might be damaging the environment" as a headline for all car owners...

Then we get to the meat of the article and the issue at hand is the "Chanthavy" has two credit cards near max. Dear oh dear, Chanthavy, you should focus on getting those cards down to $0 balance, hence not paying banks ridiculous interest rates and taking years to pay that debt off (I'm making the assumption she isn't clearing the full balance of her cards each month and likely just paying min balance due).

Here's the bit from the article below and I agree with ASIC, if the applicant is maxed out on cards and is using other pay later products, I"d recommend the lender to go deeper before granting the loan.

ASIC provides an example to highlight this point, in which ‘Chanthavy’ applies for a $20,000 secured car loan. While her credit score and history are good, she has two credit cards near their maximum limits and uses several buy now, pay later services.ASIC instructs lenders to treat such applicants as “higher risk”, possibly “operating at the margins of [their] available income” and implores the lender to go deeper on their financial situation to consider if they can make loan repayments.

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It doesn’t matter what the balance on those cards the bank must assume the limit of them as that is the liability.

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