Victorian Consolidated Legislation

Credit Act 1984 - SECT 55

Annual percentage rate

55. Annual percentage rate



(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 in accordance with the following formula:

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; and



"b" is the number of those billing cycles that would occur during a period of
one year if the contract were to continue in force for that period.



(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 per
centum.

(3) Where, in accordance with subsection (2), a continuing credit contract
includes two annual percentage rates, the statement in the notice under
section 59 of the annual percentage rate shall be made in respect of each such
rate.

(4) Except as provided by subsection (2), a continuing credit contract shall
not include more than one 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 49(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.