Target Market Determination

The product is suitable for customers who meet the general eligibility criteria, which is:

• Minimum age of 18 years
• Stable source of income, earning more than $30,000 p.a. from employment (Centrelink may be supplementary income)
• Australian citizen, permanent resident or eligible visa holder.
• Good credit history
• Loan purpose varies, but mainly for personal use.

The product is designed to meet the needs and objectives of customers looking to fund a personal purpose such as:

• Better manage personal debt obligations through consolidating debt (better interest rate/repayment amount).
• Finance a personal need (renovation, vehicle, holiday, other large purchase).

The key factors a customer considers when applying for a personal loan are:

• Interest rates, associated fees, and consistent repayments
• Flexibility to pay out the loan early
• Ease of application and time to approval
• Brand trust.

Unsecured Personal Loan Product Features

The key product features are:

• Borrow between $5,000 and $70,000.
• Choose between loan terms of 2 to 7 years and either monthly or fortnightly repayments.
• Risk adjusted pricing, based on the customer’s credit profile.
• Fees include an establishment fee, included in the total loan amount and relevant dishonor fees.

The product meets customers’ needs through the following key benefits:

• Access a rate quote (price/cost discovery) and self-determine if the product is suitable, in a quick and simple way prior to a formal loan application.
• Fixed repayments and rate over the lifetime of the loan give the customer certainty of product cost.
• The ability to pay out the loan early with no penalty fees.
• No ongoing monthly fees.
• The timing of direct debits can align to the customer’s pay cycle.
• The digital application process allows customers to apply quickly and easily.

Product affordability is assessed at the time of application to ensure the loan is affordable at the time of origination by:

• Complying with responsible lending obligations.
• Reviewing bank statements to verify income, expenses and liabilities as part of the assessment process.
• Performing a credit file check to confirm liabilities and repayment history.
• Assessing serviceability and product suitability.

The potential for a customer to misrepresent their financial needs, liabilities and expenses is controlled by:

• Reviewing bank statement to verify income, expenses and liabilities, credit file check to confirm other credit facilities and repayment history.
• Performing identity and fraud checks.
• The verification of income with customer’s bank or through payslips.

A customer’s inability to meet financial obligations due to financial hardship is controlled through the provision of hardship arrangements, made available to customers as a way to manage short term change in their financial circumstances.

Changes in the customer’s needs during the life of the loan are managed by:

• The ability to pay out the loan early, with no penalty.
• The option to refinance with loanless.
• Available hardship arrangements to manage short term negative change in the customer’s financial situation.

Customer Experience Metrics

Common reasons why a customer may not proceed with an application

Customers may not be satisfied with the quote element of the product because:

• Due to the use of risk adjusted pricing, the advertised interest rate may be lower than the rate quoted to the customer.
• The application may be declined.

Typical complaints made by personal loan customers

Customers may not be satisfied with the purchased personal product due to:

• The fees or interest charged when payment obligations are not met.
• The options available for changing loan repayments (varying the contracted repayment amount or frequency).
• The credit enquiry recorded on the customer’s credit file.
• Accessibility to account/payment change information.

Review Triggers

Events that would signal to loanless that the target market determination requires review, include:

• A material change to the product or its distribution.
• A significant increase, beyond expected levels, in the volume or nature of complaints, disputes or defaults.
• A change in law or its application, a change in relevant industry code, an AFCA determination, a court decision or ASIC or other regulatory guidance that materially affects the product.
• Feedback from a regulator or consumer group which relates to the suitability of the product or its distribution.

A significant dealing event is selling a product to a segment of customers who fall outside the target market.

loanless will stop distributing its unsecured personal loan (a 'stop distribution' event) if:

• Systemic issue occurs which suggests a breach of core compliance obligations.
• A Cyber security results in a compromise of customer data or fraudulent compromise of the business.
• Funding limitations.