A Medium Amount Credit Contract (MACC) is a legal category for consumer loans with strict limitations on fees, interest, loan amounts and repayment timeframes.
To qualify as a MACC the loan amount must be between $2,001 and $5,000 with a term from 16 days up to two years.
They are generally used by people with an urgent need for cash or are unable to access mainstream forms of credit.
In this article, we will explain how these loans work, the costs involved, and how to qualify for a Gusto Cash Loan.
What is a Medium Amount Credit Contract (MACC)?
A MACC loan can be secured against an asset, or an unsecured cash loan, depending on your specific situation.
They are a one time cash advance that is repaid like a regular term loan.
Often used for significant purchases, or one off expenses, that can be repaid over a reasonable timeframe.
Under Australian consumer law, the parameters are strictly limited to:
| Loan Parameters | MACC |
| Loan Amount | $2,001 to $5,000 |
| Loan Term | 16 days to 24 months |
| Establishment Fee | Up to $400 |
| Ongoing Cost | Up to 48% interest |
| Security | Secured or Unsecured |
Common uses for a MACC personal loan include:
- Consolidating scattered small debts.
- Paying rental bonds.
- Covering larger vehicle repairs.
- Household repairs and appliance replacement.
- Holiday expenses.
- Unexpected, and urgent, cash needs.
The $2,001 MACC Threshold Explained
The $2,001 minimum is a hard legal threshold.
Borrowing exactly $2,000 places you in a small loan category (SACC) with completely different fee rules compared to a MACC.
Once you hit $2,001 the MACC regulations are triggered and you will be subject to the parameters above.
Your actual loan size will depend on your requirements and objectives, plus affordability considerations.
The Cost of a MACC Loan
At Gusto Cash, our MACC pricing is straightforward: a $400 establishment fee and a 47% annual interest rate.
The establishment fee is a one-off charge to open your account, while the interest is an ongoing cost calculated over your loan term.
Most MACC lenders have a very similar pricing structure. Where things differ is with the various other fees that can be included in the contract.
For example, early repayment fees can be costly with some lenders charging upwards of $100 to payout your loan before the contract date.
Gusto Cash does not charge an early repayment fee and believes that you should be able to pay off your debt at any time without penalty.
Total MACC Cost Example
A $2,001 MACC with a repayment term of 12 months will cost a total of $955.06.
- $2,001 MACC
- $400 Fees
- $246.33 Monthly Repayments
- $2,956.06 Repaid over 12m
- $956.06 Total Cost
How to Qualify for a MACC Loan
MACCs are designed for borrowers who need a medium amount of cash quickly, those with a lower credit score, or are otherwise unable to access mainstream credit products.
Some additional eligibility criteria include:
- Being over 18 years old.
- An Australian citizen or permanent resident.
- Centrelink is not their sole source of income.
A responsible lending assessment would be completed to ensure you can afford the loan.
As part of this, your bank transaction data will be analysed to verify your:
- Earnings
- Financial obligations
- Essential living costs.
- Discretionary expenses
If you can comfortably afford the loan, and meet other internal credit criteria you will qualify for a Gusto Cash MACC loan.
When a MACC Loan Makes Financial Sense
A MACC loan is suited for unexpected and time-sensitive cash needs that are a one off cost.
Some examples include:
- Buying a cheap used car, or mechanical repairs to an existing one.
- Cosmetic surgery or other unexpected medical bills.
- Moving expenses and/or a rental bond.
- New furniture or appliances for your home.
- Small renovations or a cash flow gap to complete a project.
- Last minute wedding expenses.
- Unexpected funeral costs.
While the cost relative to the loan amount can be higher than a regular personal loan, the time to deposit can be much faster and the repayment term shorter.
So the total cost in dollar terms can be comparable in some circumstances.
When Not to Use a MACC Loan
Avoid using credit for bills where there may be alternative hardship programs available to you.
This will allow you to spread out payments over time, usually without incurring interest.
For example, if you are behind on your power bill and will struggle to pay this off while also affording groceries for the week you should contact your service provider for a payment plan.
This is a much cheaper option than any new form credit.
Frequently Asked Questions
Is a MACC loan the same as a payday loan?
No. A MACC is a regulated category for personal loans between $2,001 and $5,000. Payday loans are smaller amounts with a different fee structure and eligibility requirements.
Why does borrowing $2,001 matter so much?
This amount crosses a legal threshold that changes the required loan fee structures to a MACC. The loan is then subject to all of the relevant loan parameters in the credit legislation.
Will applying for a MACC hurt my credit score?
Lenders perform credit checks during assessment, leaving a standard inquiry on your file. This will temporarily drop your credit score, but it will rebound as long as you are making all of your repayments on time.
What if I cannot afford a MACC loan right now?
If you cannot afford the minimum repayments on a MACC loan then you will not be approved. You should explore options tnat do not require additional credit to take care of any urgent expenses. You may be able to request a payment plan with your biller, or apply for hardship consderation with existing creditors. You can also contact a financial counsellor for free advice.
How to Apply for a MACC Loan
Apply for a MACC loan online and complete all steps digitally in a matter of minutes.
You can submit the required banking and identity information through our secured portal for rapid assessment.
Click below to get started and the team will be in touch shortly.
