Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

CORPORATIONS ACT 2001 - SECT 588FD

Meaning of unfair loan

  (1)   A loan to a company is unfair if, and only if:

  (a)   the interest on the loan was extortionate when the loan was made, or has since become extortionate because of a variation; or

  (b)   the charges in relation to the loan were extortionate when the loan was made, or have since become extortionate because of a variation;

even if the interest is, or the charges are, no longer extortionate.

  (2)   In determining:

  (a)   whether interest on a loan was or became extortionate at a particular time as mentioned in paragraph   (1)(a); or

  (b)   whether charges in relation to a loan were or became extortionate at a particular time as mentioned in paragraph   (1)(b);

regard is to be had to the following matters as at that time:

  (c)   the risk to which the lender was exposed; and

  (d)   the value of any security in respect of the loan; and

  (e)   the term of the loan; and

  (f)   the schedule for payments of interest and charges and for repayments of principal; and

  (g)   the amount of the loan; and

  (h)   any other relevant matter.


AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback