Practice Test Geeks(NAB) National Australia Bank Practice Test
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Lending and Credit Flashcards

7 cards from real NAB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Lending and Credit flashcards as text

  1. Under responsible lending obligations, what must NAB determine before approving a credit application?

    Answer: That the credit product is not unsuitable for the applicant's needs and financial situation

    Responsible lending laws require NAB to ensure any credit product is not unsuitable for the customer's stated needs, objectives, and financial circumstances.

  2. What does a 'comparison rate' in NAB's loan advertising represent?

    Answer: The true cost of the loan incorporating most fees and charges into a single annual rate

    A comparison rate combines the stated interest rate with most associated fees and charges to give a more accurate representation of a loan's true annual cost.

  3. How does an offset account reduce the interest charged on a NAB home loan?

    Answer: The offset account balance is subtracted from the loan principal when calculating interest

    An offset account reduces interest charges because NAB calculates interest only on the loan balance minus the offset account balance.

  4. What does an 'interest-only' repayment period on a NAB home loan mean for the borrower?

    Answer: Repayments cover only the interest charge; the principal balance does not reduce

    During an interest-only period, the borrower's repayments service only the interest; the original loan principal remains unchanged until the period ends.

  5. What is a NAB construction loan primarily designed for?

    Answer: Financing the staged building of a new residential property with progressive fund drawdowns

    A construction loan releases funds in stages as each building milestone is completed, rather than as a lump sum at settlement.

  6. How may a change in the RBA cash rate affect NAB's variable home loan interest rate?

    Answer: NAB may adjust its variable rate in response to RBA decisions but is not obligated to pass on changes in full

    While RBA decisions influence NAB's variable rates, NAB sets its own rates based on funding costs, competition, and business decisions — it is not legally required to pass on changes in full.

  7. What is the purpose of a guarantor in a NAB home loan?

    Answer: A third party agrees to be liable for the loan repayments if the primary borrower defaults

    A guarantor provides NAB with additional security by agreeing to meet loan obligations if the primary borrower is unable to make repayments.