Elements and Performance Criteria

RANGE STATEMENT
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.
The role of consumer credit includes:
enabling approved applicants the ability to purchase items (goods and/or services) where the cost of the item exceeds current savings available.
Advantages and disadvantages of credit may include:
advantages:
obtain and can use purchased item immediately
minimises the need to carry cash or write cheques
allows for instalment payments on expensive items
convenient form of payment when travelling, especially overseas
disadvantages:
may increase cost of items purchased due to interest accrued
usually attracts other fees such as account servicing fees
can lead to compulsive buying habits
creates a false sense of wealth.
Consumer credit facilities may include:
fixed:
personal loans
leases including mobile phones, cars, business premises, office equipment including personal computers
hire purchase
'buy now, pay later' schemes
revolving:
credit cards
store cards
overdraft.
Differences between unsecured and secured loans include:
a secured loan is supported by an underlying asset while an unsecured loan is not
unsecured loans attract higher interest rates due to increased risk to the lending institution.
Implications of default on secured loans include:
any shortfall in sale of repossessed asset against outstanding loan amount must be paid by borrower
repossession of the underlying asset by the lending institution.
Fees and costs associated with different credit options may include:
account servicing fees
credit purchase fees
late payment fees
loan establishment fees
withdrawing from a foreign Automatic Teller Machine (i.e. the ATM of a lending institution other than your own).
Fees and costs may be analysed and compared using:
manually, comparing fees and costs drawn from tables and charts provided by financial institutions and analysed using a calculator
online, web-based, calculation tools
software applications such as spreadsheets.
Ways to compare advertised interest rates may include:
informing the client of the 'comparison rate' which includes all associated fees and charges.
Strategies to minimise fees on credit may include:
consolidating savings and credit facilities with the one institution where account servicing fees can be cancelled out
knowing how many free transactions come with the card
paying the minimum monthly instalment on time.
Ways to avoid credit card fraud include:
not disclosing Personal Identification Number (PIN) to anyone
selecting a PIN only the card holder would know
signing the back of the credit card.
Credit reference reports refers to:
reports established and maintained by credit reference agencies which record all negative events (i.e. defaults) listed by creditors against debtors.
Implications of establishing a poor credit history may include:
higher interest rate penalties
inability to obtain finance in the future
may disadvantage applications for rental accommodation
necessity to obtain guarantor in future loans.
Methods of obtaining own credit reference file may include:
writing, emailing or telephoning the relevant agency requesting a copy of your file, having provided relevant details to identify self.

EVIDENCE GUIDE
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.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
analyse and clearly explain the role of credit within the community
analyse and clearly explain the different types of consumer credit options currently available
analyse and clearly explain the associated implications and risks of the various credit schemes available, as well as the implication of establishing a poor credit reference history.

Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the the range statement
access to and the use of a range of common office equipment, technology, software and consumables
access to internet to source information.

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:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills
setting and reviewing simulations or scenarios
group discussion to determine and confirm understanding.

Guidance information for assessment