Elements and Performance Criteria

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.


enabling approved applicants the ability to purchase items (goods and/or services) where the cost of the item exceeds current savings available


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


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


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


repossession of the underlying asset by the lending institution

any shortfall in sale of reposed asset against outstanding loan amount must be paid by borrower


loan establishment fees

credit purchase fees

late payment fees

account servicing fees

withdrawing from a foreign Automatic Teller Machine (ie. the ATM of a lending institution other than your own)


software applications such as Excel

online, web based, calculation tools

manually, comparing fees and costs drawn from tables and charts provided by financial institutions and analysed using a calculator


informing the client of the 'comparison rate' which includes all associated fees and charges


paying the minimum monthly instalment on time

know how many free transactions come with the card

consolidating savings and credit facilities with the one institution where account servicing fees can be cancelled out

Ways to

not disclosing Personal Identification Number (PIN) to anyone

selecting a PIN only the card holder would know

signing the back of the credit card


reports established and maintained by credit reference agencies which record all negative events (ie. defaults) listed by creditors against debtors


inability to obtain finance in the future

necessity to obtain guarantor in future loans

higher interest rate penalties

may disadvantage applications for rental accommodation


writing, emailing or telephoning the relevant agency requesting a copy of your file, having provided relevant details to identify self

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

To achieve competency in this unit, a person must be able to demonstrate the following:

ability to analyse and clearly explain the role of credit within the community
ability to analyse and clearly explain the different types of consumer credit options currently available
ability to 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

Evidence required for demonstration of consistent performance:
Competence in this unit must be assessed over a period of time in order to ensure consistency of performance over the Range Statement and contexts applicable to the work environment.

Delivery/assessment relationship to other units:
This unit may be assessed on its own or it may be assessed with other units that cover related skills and knowledge.
Evidence is most relevant when provided through an integrated activity which combines the elements of competency for the unit, or a cluster of units of competency.

Method of assessment:
For valid and reliable assessment of this unit, evidence should be gathered through a range of methods to indicate consistent performance.
Assessment of this unit of competence will usually include observation of processes and procedures, oral and/or written questioning on underpinning knowledge and skills and other methods as required.

Context of assessment:
This unit may be assessed in a formal learning environment, on-the-job or within the environment of a related service provider such as counselling or advisory services.

Resources required for assessment:
Assessment of this unit of competence requires access to information about current and historic interest rates, information about a wide range of credit products, software and other resources relevant to the unit of competency.