Concern at rental loan scheme

A new company, MoveSmart, is offering 24.95% unsecured loans to people who need help with expenses such as a bond, rent in advance or repairs when they move out of a property. The money is paid directly to the landlord or property manager.

Terms are available of three to 24 months but most tenants are opting for six to 12 months.

Andrew King said it was more dangerous than something such as BondAssist, which offers a form of insurance in case a bond is claimed by a landlord.

He said people should not be encouraged to take out a loan to cover a bond. “Tenants can get into a terrible downward spiral through borrowing. It might not be good for the landlord but it’s worse for the tenants.”

MoveSmart’s Andrew Chisnall said the company had been in operation for two months. He said sometimes banks were not willing to lend for expenses such as a bond. His company could provide the money very quickly.

He said people would not be allowed to borrow more to keep up with expenses such as ongoing rent payments.

Many people would not have the $2000 or $3000 required to move into a new property, even if they had well-paying jobs, he said.

King said the only way he would support the scheme was as a form of bridging finance for people who needed to pay a bond for a new property but had not yet received the bond back from their former landlord.