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Unit of competency details

FNSFLT213 - Develop knowledge of debt and consumer credit (Release 1)

Summary

Usage recommendation:
Current
Mapping:
MappingNotesDate
Supersedes and is equivalent to FNSFLT203 - Develop knowledge of debt and consumer credit 01/Feb/2021

Release Status:
Current
Releases:
ReleaseRelease date
1 1 (this release) 02/Feb/2021


Classifications

SchemeCodeClassification value
ASCED Module/Unit of Competency Field of Education Identifier 080101 Accounting  

Classification history

SchemeCodeClassification valueStart dateEnd date
ASCED Module/Unit of Competency Field of Education Identifier 080101 Accounting  02/Feb/2021 
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Unit of competency

Modification History

Release 

Comments 

Release 1

This version first released with FNS Financial Services Training Package Version 6.0.

Application

This unit describes the skills and knowledge required to understand the functions and implications of different forms of credit, and the strategies and methods to make decisions regarding management of personal debt and use of credit facilities. It has wide application and may be used in workplaces, schools, adult and community learning organisations or registered training organisations to build the financial literacy of learners. The unit may also be used as part of pre-vocational or new apprenticeship programs, or as part of services provided by counselling or advisory organisations.

The unit applies to those who explore new ideas and techniques to build personal financial literacy knowledge.

No licensing, legislative or certification requirements apply to this unit at the time of publication.

Unit Sector

Financial literacy

Elements and Performance Criteria

ELEMENT 

PERFORMANCE CRITERIA 

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Identify role of credit in society

1.1 Identify concepts and terminology of credit provided by financial institute and debt incurred by borrower

1.2 Identify historical and current role of consumer credit in Australian society

1.3 Identify advantages and disadvantages of credit use

1.4 Discuss impact of consumer debt on national economy

2. Identify range of credit options available

2.1 Identify and compare types of credit facilities used by businesses and by individuals

2.2 Identify differences between unsecured and secured loans

2.3 Identify implications of default on secured loans to borrower

3. Identify and compare costs of using credit

3.1 Compare fees and costs associated with different types of credit options

3.2 Compare features and associated risks of fixed versus variable interest rates

3.3 Identify ways to compare advertised interest rates and effects of fees and charges

4. Identify effective use of consumer credit

4.1 Identify ways to avoid excessive and unmanageable debt

4.2 Identify strategies to minimise fees on credit

4.3 Identify effects of meeting and not meeting minimum payments on credit cards

4.4 Identify ways to avoid credit card fraud

5. Review personal credit rating and history

5.1 Identify role of credit reference agencies

5.2 Identify purpose and use of credit reference reports in assessing loan applications

5.3 Identify implications of establishing a poor credit history

5.4 Describe methods of obtaining own credit reference report and identify information on right to access the report

Foundation Skills

This section describes those language, literacy, numeracy and employment skills that are essential to performance but not explicit in the performance criteria.

SKILL 

DESCRIPTION 

Numeracy

  • Performs a range of mathematical calculations to interpret the impact of varying fees and costs and to compare financial information

Oral communication

  • Participates in verbal exchanges using active listening and questioning to elicit information and develop a clear understanding

Reading

  • Researches, interprets and compares written information from a range of sources to identify key details relevant to the enquiry

Writing

  • Documents information using correct spelling, grammar and terminology
  • Describes concepts accurately and in a format appropriate for the audience and purpose

Self-management

  • Identifies, confirms and understands regulatory requirements
  • Maintains up-to-date knowledge of debt and consumer credit required for own situation

Technology

  • Uses digital systems and tools to conduct research and complete tasks

Unit Mapping Information

Supersedes and is equivalent to FNSFLT203 Develop knowledge of debt and consumer credit.

Links

Companion Volume Implementation Guide is found on VETNet - https://vetnet.gov.au/Pages/TrainingDocs.aspx?q=c7200cc8-0566-4f04-b76f-e89fd6f102fe

 

Assessment requirements

Modification History

Release 

Comments 

Release 1

This version first released with FNS Financial Services Training Package Version 6.0.

Performance Evidence

The candidate must demonstrate the ability to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including evidence of the ability to:

  • present overview of the functions of at least two different forms of credit.

In the course of the above, the candidate must:

  • identify strategies and methods to make decisions regarding management of personal debt and use of credit facilities.

Knowledge Evidence

The candidate must be able to demonstrate knowledge to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including knowledge of:

  • key principles and types of lending and credit options
  • role of credit in society
  • key stakeholders involved in the provision and management of credit such as financial institutions, regulatory bodies, credit reference agencies and consumer advisory bodies
  • advantages and disadvantages of credit
  • examples of fixed and revolving credit facilities
  • key features of secured and unsecured loans, and the implications of default on secured loans
  • methods for comparing fees and costs, and minimising fees
  • key methods to avoid credit card fraud
  • key features of and methods of obtaining credit reference reports
  • implications of an individual having a poor credit rating
  • techniques to compare financial information.

Assessment Conditions

Skills in this unit must be demonstrated in a workplace or simulated environment where the conditions are typical of those in a working environment in this industry.

This includes access to:

  • office equipment, technology, software and consumables
  • internet to source information.

Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.

Links

Companion Volume Implementation Guide is found on VETNet - https://vetnet.gov.au/Pages/TrainingDocs.aspx?q=c7200cc8-0566-4f04-b76f-e89fd6f102fe