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
If a NAB home loan borrower experiences unexpected financial hardship, what is the recommended first step?
Answer: Contact NAB's hardship assistance team to discuss tailored repayment support options
NAB's hardship team can arrange repayment deferrals, restructured schedules, or other assistance — early contact always produces the best outcomes.
What is the primary purpose of a NAB 'bridging loan'?
Answer: To provide short-term finance when purchasing a new property before the existing one is sold
A bridging loan provides temporary finance allowing borrowers to buy a new home before their existing property has settled and proceeds are received.
What does a high Debt-to-Income (DTI) ratio signal to NAB during a credit assessment?
Answer: A large portion of the borrower's gross income is already committed to servicing existing debts
A high DTI ratio indicates that existing debt repayments already consume a significant share of the borrower's income, increasing the risk of further lending.
When a borrower refinances from their existing lender to NAB, which cost is typically charged by the departing lender?
Answer: A discharge fee or break cost levied by the existing lender upon loan exit
The lender being left typically charges a discharge fee to close the mortgage, and fixed-rate loans may also attract a break cost calculated on rate differential.
In NAB's credit policy, what is 'negative equity'?
Answer: When the outstanding loan balance is greater than the current market value of the mortgaged property
Negative equity occurs when a property's market value drops below the remaining mortgage balance, meaning the borrower owes more than the asset is worth.
Why does NAB require two years of personal tax returns from a self-employed home loan applicant?
Answer: To assess sustainable average income trends across multiple years for reliable serviceability testing
Two years of tax returns allow NAB to average and trend-test business income, providing a more reliable and conservative income figure for serviceability calculations.
What is the primary benefit of a NAB 'split loan' arrangement?
Answer: Part of the loan is fixed for interest rate certainty while the remainder is variable for flexibility and extra repayments
A split loan gives borrowers the rate security of a fixed portion alongside the flexibility and redraw benefits of a variable portion on a single property.