Queensland Consolidated Acts

CREDIT ACT 1987 - SECT 56

(1) For the purposes of this Act, a reference to the annual percentage rate in relation to a continuing credit contract is a reference to the percentage rate calculated--

(a) in accordance with the following formula--

n = a x b

where--

n is the annual percentage rate to be calculated;

a is the percentage rate that, under the contract, is to be applied to the chargeable amount for each billing cycle of the contract to yield the credit charge;

b is the number of those billing cycles that would occur during a period of 1 year if the contract were to continue in force for that period; or

(b) in accordance with the following formula--

where--

n is the annual percentage rate to be calculated;

c is the credit charge for a billing cycle of the contract;

d is the chargeable amount for the billing cycle;

e is the number of days of the billing cycle.

(2) Where, under a continuing credit contract--

(a) credit is or may be provided to the debtor by way of the supply of cash by the credit provider or any other person; and

(b) the payment of a debt or other pecuniary obligation or the performance of any other obligation under the contract is secured by a mortgage of land;

the contract may include an acceptable rate of interest and a higher annual percentage rate that does not exceed the acceptable rate by more than 2%.

(3) Where, in accordance with subsection (2), a continuing credit contract includes 2 annual percentage rates, the statement in the notice under section 60 of the annual percentage rate shall be made in respect of each such rate.

(4) Subject to subsection (2), a continuing credit contract shall not include more than 1 annual percentage rate in respect of the contract.

(5) Where the annual percentage rate in respect of a continuing credit contract may, at the option of the credit provider, be any rate less than, or not exceeding, an annual percentage rate specified by the credit provider, that specified rate shall, for the purposes of section 50(1)(a) be deemed to be the annual percentage rate in respect of the contract, whether or not the annual percentage rate applied under the contract is a lower rate than that specified rate.