Modification History
Not applicable.
Unit Descriptor
Unit descriptor |
This unit describes the performance outcomes, skills and knowledge required to explain the functions and implications of different forms of consumer credit as part of developing the financial skills of clients. No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement. |
Application of the Unit
Application of the unit |
This unit may have particular application in lending institutions prior to accepting loan applications received by those with minimal financial awareness especially the young, recent school leavers, unemployed, senior citizens and those from non-English speaking backgrounds. |
Licensing/Regulatory Information
Not applicable.
Pre-Requisites
Prerequisite units |
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Employability Skills Information
Employability skills |
This unit contains employability skills. |
Elements and Performance Criteria Pre-Content
Elements describe the essential outcomes of a unit of competency. |
Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide. |
Elements and Performance Criteria
ELEMENT |
PERFORMANCE CRITERIA |
1. Identify range and type of consumer credit options |
1.1. The role of consumer credit is identified and advantages and disadvantages of credit are discussed with the client 1.2. Types of consumer credit facilities are explained to the client in plain language including the differences between unsecured and secured loans 1.3. Implications of default on secured loans are explained to the client |
2. Identify and discuss costs of using credit |
2.1. Fees and costs associated with different types of credit options and the features and associated risks of fixed versus variable interest rates are explained to the client 2.2. Ways to compare advertised interest rates and the effects of fees and charges are demonstrated to the client |
3. Promote effective use of consumer credit |
3.1. Ways to avoid excessive or unmanageable debt are discussed with the client in relation to their financial situation 3.2. Strategies to minimise fees on credit including the importance of meeting minimal payments on credit cards are discussed with the client 3.3. Ways to avoid credit card fraud are identified and communicated to the client |
4. Provide client with information regarding credit reference reports |
4.1. The role of credit reference agencies is discussed and explained to the client in plain language 4.2. The purpose and use of credit reference reports in assessing loan applications and the implications of establishing a poor credit history are emphasised and explained to the client 4.3. The right to access and methods of obtaining own credit reference report is explained, and relevant contact details provided to the client for follow up if required |
Required Skills and Knowledge
REQUIRED SKILLS AND KNOWLEDGE |
This section describes the skills and knowledge required for this unit. |
Required skills |
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Required knowledge |
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Evidence Guide
EVIDENCE GUIDE |
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The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package. |
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Overview of assessment |
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Critical aspects for assessment and evidence required to demonstrate competency in this unit |
Evidence of the ability to:
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Context of and specific resources for assessment |
Assessment must ensure:
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Method of assessment |
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
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Guidance information for assessment |
Range Statement
RANGE STATEMENT |
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The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included. |
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The role of consumer credit includes: |
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Advantages and disadvantages of credit may include: |
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Consumer credit facilities may include: |
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Plain language refers to: |
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Differences between unsecured and secured loans include: |
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Implications of default on secured loans include: |
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Fees and costs associated with different credit options may include: |
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Ways to compare advertised interest rates may include: |
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Strategies to minimise fees on credit may include: |
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Ways to avoid credit card fraud include: |
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Implications of establishing poor credit history may include: |
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Methods of obtaining own credit reference report may include: |
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Unit Sector(s)
Unit sector |
Credit management |
Competency field
Competency field |
Co-requisite units
Co-requisite units |
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