The Bank of Mum and Dad revealed as one of Australia’s largest and most trusting financial institutions, but at what cost?

The generosity of individuals lending money to their children to support them getting their first home or running a small business can be a recipe for disaster without the right protection and documentation in place.

More people than ever are leaning on their parents for support getting in to their first home or starting a new business.

A recent report showed the Bank of Mum and Dad is the 10th largest lender in the country, and funding over $20 Billion in loans.

An article released this week in the Australian Financial Review revealed that the Bank of Mum and Dad is responsible for 25% of SME loans.

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Seeking The Bank of Mum and Dad to Repair Costly Decisions

repair costly decisions

Written for Credi Pty Ltd by Brittany Veroba

Have you ever returned from your long awaited holiday, that took years of saving, to only find yourself starting to save all over again? On top of that, have you also found yourself breaking an expensive item as soon as you return? Does this sound like you, because it sure sounds like me!

In my case, it was my phone. I managed to keep it in one piece on my month long holiday around Europe. Trust me, I was pretty surprised with myself. I let my guard down – as you naturally would – when I arrived home. Less than a month later it would be broken at no fault but my own.

Now I am out seeking the Bank of Mum and Dad for some extra cash. This was initially proving harder than I thought. Persuading Mum and Dad to let me borrow over $1,000 with no guarantee of me paying them back was a difficult obstacle. You would have thought that trust would have been there, after 22 years, but I guess not.

So, here are 5 tips to avoid being in my position:

  1. Be Cautious

Why do expensive mistakes always occur at the most unsuitable time? Make sure you are extra careful with your belongings, especially when money is low.

And please, don’t leave your phone on the gym floor like I did. It is likely a weight will fall on it and you will be back to using a ‘brick’ phone for the next month.

  1. Emergency Money

Try and set aside some money in case of events like this occurring. Yes I know, most of you wouldn’t classify this necessarily as an emergency. I didn’t either until I actually realised how much I relied on my smartphone.

  1. Use a savings app

Savings apps such as TrackMySPEND and Pocketbook are a great way to keep track and monitor what your money is going towards. Visually seeing this can help put your spending habits into perspective.

  1. Eat out less

Our generation seems to be known for their ‘smashed avo’ and coffee obsession. Don’t worry, you can still enjoy these delicious treats, just cut down how much you are spending on food and drinks per week. Even if it is cutting down from $40 per week to $35, the smallest increments still count.

  1. #CrediMe Mum and Dad!

If only I knew about this one…. If you are still in need of money, this step makes it a lot easier when trying to form a convincing argument towards borrowing your parent’s money. Credi is an online platform that enables a contractual loan to be created between family and friends. Each agreement is tailored by both parties to suit their situation AND the platform helps you manage the whole process from start to finish (no matter how long the agreement). This way your parents will be assured that you will pay them the full amount back. For more information visit Credi and create a free Credi account today!


Written for Credi Pty Ltd by Brittany Veroba



I’m a member of gen Y living in an expensive city with a new sense of hope

Gen Y housing market

Written for Credi Pty Ltd by Harry McGregor

My name is Harry, I’m 23 and I am a member of Gen Y. Throughout my time at @notredamebusiness the thought of house ownership has never really crossed my mind until recently. Every other morning, I go to my local supermarket and purchase my $4 avocado for avo on toast. Just like an alarm you set religiously, almost every morning I am reminded by my baby boomer parents that this smashed avo on toast is the reason why I’m locked out of the Perth housing market. Unfortunately, I’ve fallen into the generation where housing is unaffordable, education is far from free and health cover costs an arm and a leg. The general trend within our society is “skill up”, get an education, get a job, save up and get a mortgage. However, for me at this very moment in time, I’m not seeing a light (or house) at the end of the tunnel.

I decided to have a chat with my Mum to see if I can shake this financial fear and gain an insight into how I can approach this situation. This is a snippet of our conversation.

Me: So Mum, at what age did you buy your first house?

Janie: I was 18.

Me: So it was roughly 1980 when you first invested?

Janie: It was 1981 and your uncle (Andy), Grandmother and myself invested in a property in Cottesloe.

Me: How much did the property cost you?

Janie: We bought the property outright at $20,000. Andy and I put in $5000 each and Gran put in the remaining $10,000. At the time it was purely an investment.

Me: So how did you come up with the capital? Did you save up and have a plan in place?

Janie: It was a gift from my uncle that all our relatives got. At the time it seemed like the perfect solution to invest.

I guess where I am going with this, is that housing prices are not the same as 1981 and with a median house price of $1,875,000 in Cottesloe, it’s fair to say that times have changed and certainly house prices have too. When discussing this topic with Mum the idea of deposits and bank loans was scary. When I pitched the idea of borrowing money from them, there were no surprises in her reaction;

“Harry, do you think I can honestly trust you with paying back a deposit on a house? I’m still waiting on the money I lent you for fixing the car?”

“But what if we were in a contract together?”

This was where Credi came in to save the day. With the ability to build a loan, negotiate the loan to best meet our interests and with access to repayment management, it seemed too good to be true. PLUS it was FREE to create an account! My personal experiences (and more importantly my parent’s experiences) have not been pleasant, to say the least in terms of lending money, with disagreements on how much I owe and when am I going to pay them back. Credi sorted all that out for us, the platform formalised the agreement and managed the process from start to finish.

Thanks to Credi, I have a new sense of hope.


Written for Credi Pty Ltd by Harry McGregor


Traveling Clues: how to travel when you’re 19, work part time & a student


Written for Credi Pty Ltd by Emily Judd

Travel (noun): To go from one place to another, as on a trip; journey.

It’s a dream we all have, whether it’s swimming with dolphins in the Bahamas or fine dining in Paris on a beautiful summer’s night. The need for travel brings us all together, it’s something we expect to experience at some point in our life- but sadly, not so much anymore. From a young age, my parents told me their exhilarating stories of traveling with friends in their teenage years. It became an expectation of mine that I would make the same memories. So I did what any young kid would do, I made a lemonade stand to make an income, which turned into a babysitting gig and now, a part-time sales assistant role. Travel is my dream, and I have never stopped working or saving to reach it.

However, I’m going to be completely honest, growing up in the 21st century is hard. No matter how much I worked there was always expenses in my way, whether that be textbooks for university, fuel or phone bills, it just didn’t seem to stop. My dream of traveling the world and experiencing exotic cultures slowly became more and more unrealistic. The tales my parents once told me seemed like a far cry and it was an unwelcomed reality check.

Not surprisingly, before long I found myself booking an appointment at my local bank to apply for a travel loan. When the day finally came, I walked into the bank with my parents, extremely excited at the prospect that my dream of travel may actually come true. But once again, there was another halt in my plans. I’m not sure if you’ve ever applied for a loan at my age, but I’ll tell you now, it’s a no go. Firstly, I’m a university student, secondly, I only work part-time and thirdly, I’m only nineteen. Three strikes and I was out. I ended up walking out of the bank in tears, not knowing what else I could possibly do to fulfill my dream of travel.

A few weeks later, my parents called me into the dining room to have a ‘chat’ a.k.a every teenager’s worst nightmare. I frantically started questioning everything I had done earlier in the week. Had I left the milk out? Had I not made my bed? Or did I suddenly turn into an underworld queen? Spoiler alert, I hadn’t. Instead, my parents put a piece of paper in front of me titled “The Bank of Mum and Dad”. It was a term that I had never heard before, however, everything changed that day.

My parents explained to me that through the assistance of lending platform Credi, they would be more than happy to loan me the money for my travels. Instead of fighting a losing battle with the banks and accepting to pay a crazy high-interest rate, my wonderful, amazing and beautiful parents would loan me the money- without interest! Credi allowed us to create a custom loan agreement and manage the whole process. For the first time since the tender age of six, exploring the world and all it had to offer seemed possible.

This saga occurred six months ago, and so much has changed since then. I am now sitting here writing this blog in Nice, France, whilst sipping on champagne. With the help of my parents and Credi, all my dreams came true and I have been able to travel the world. I can now return to Australia and tell all my friends and family about the wild adventures I got up to. AND I bet you can guess where I’ll be off to next- that’s right, the Bahamas to swim with dolphins!


Written for Credi Pty Ltd by Emily Judd






Written for Credi Pty Ltd by Nicholas Perman

Being a part of generation Y has its challenges. One of the many challenges currently facing 20 something’s is buying a house. For students like myself, there are really only two options available. Live with your parents or start renting.

Today’s property market is both challenging and rewarding for those who are able to enter the market. For people like myself, a 22-year-old university student, the possibility of self-funding a deposit for a home is virtually impossible. So the question stands, how do I fund my future? It seems a daunting task, with lending from the bank seeming like a never-ending trap of interest rates.

Luckily, I’ve found a solution. The #BankOfMumAndDad or BOMAD. Although this may seem like a cop-out to some, I’ve found this is my only way to get my foot in the door and set myself up for the future. With many speculating that real estate prices will drop in the next year, I have devised a plan to help secure my future in the real estate market.

Using #Credi, my parents and I are going to organise a payment plan, where I will pay them back over a due period. By using Credi I can formalise and manage this agreement with my parents or BOMAD. I will also be able to take advantage of the low property prices expected in the next year, without falling into a heap of debt with a bank.

Once I finish Uni at the end of 2017, I am hoping to gain full-time employment, which will help me gain the finances needed to pay my parents back for the initial loan over time. In a time where my generation is struggling to get out of the rent trap, #Credi is a life raft, allowing those who are fortunate enough to get a loan from the bank of Mum and Dad to get their foot in the door of Perth’s profitable property market.

In a time where my generation is struggling to get out of the rent trap, #Credi is a life raft, allowing those who are fortunate enough to get a loan from BOMAD to get their foot in the door and access the property market.

Credi’s ability to let you pay back the loan over anytime, of any amount and including any conditions is attractive. They’re also in the process of creating a document that can document the agreement as a gift, which some parents like to do. The platform also helps you take steps to become financially minded, by helping you manage your money and loan agreements without affecting your credit rating. It’s almost practice for later on in life when we might need to go to a bank for a larger loan.


Written for Credi Pty Ltd by Nicholas Perman



What to do when reality hits!

reality hits

Written for Credi Pty Ltd by Alexandra Rough

Imagine you have just come home from your whirlwind six-week getaway to Europe. You have spent weeks walking, eating and taking thousands of photos of this, that and the other, not having a care in the world about your responsibilities waiting back at home for you. You have spent days lying on the beautiful Croatian coast, you have walked along the cobbled streets of Italy, eating ice-cream until you couldn’t eat anymore, you have wrestled with the thousands of tourists cramming into the Tube and all of a sudden you are now home and little did you know reality was about to hit you real hard. This was me, this is my story of being a twenty-something globetrotter whose travelers high came crashing down, fast!

Travelling around Europe was a dream I had had since my days in middle school, I spent my days scrolling through pictures of all the sites and places I wanted to go. I pinned pictures to my wall to keep me motivated to save and I meticulously planned my trip for a year in advance. I worked two jobs, tirelessly, throughout my first two years of university to pay for the trip. Being a uni-student and saving is not always the easiest thing to do, life is expensive and adulting is hard. I went away knowing I had a small amount in the bank to keep me safe for when I returned. I had a budget for my trip and to my surprise, I didn’t completely blow my budget and nor did I have to call the ‘Bank of Mum & Dad’ while I was away to bail me out, unlike a few of my friends… (but that is another story).

I have stepped off the plane, still slightly jet-lagged, I have a half unpacked suitcase, I have a pile of laundry the size of a small hill forming a nice blanket for my bedroom floor and I’m racing out the door to catch up with friends for the first time in weeks. I grab my car keys and jump into my car. My car and I have been everywhere together and I can’t remember a time that it wasn’t around, you see it has been with the family since before I was born and was graciously handed down to me when I first got my license. Before I left, my car precious car had definitely been showing some signs of aging, you could no longer wind the windows down and the doors were slightly unreliable, but I was confident it would go the distance. I go to put the keys into the ignition, excited to meet with my friends, but it doesn’t start. Nothing. Just the empty clicking sound of the engine trying to ignite and failing miserably. So I called the mobile mechanic service and there was nothing they could do to resurrect my helpless car.

Stranded and having the reality of life hitting me hard, I was faced with the impossibility of finding a car not only to catch up with my friends but for my everyday life of getting to work, university, sport and everything in between. What was I going to do? I had just come home, not having worked in weeks and had a bank account that hadn’t looked this low since middle school. My small amount of safety money wasn’t going to cut it. But I needed a car, public transport wasn’t an option, taxis are for the wealthy and cycling was pointless with our weather. I had to buy a new car. But how? I looked into buying a super cheap second-hand car that might last me a few months (at best) whilst I got my feet back on the ground or I could get a loan. With option 1 being ruled out due to the fact that I would soon be left with the same problem in the not too distant future, option 2 was the only way I was going to solve my little predicament. Then I had another choice, go to the bank, get a car loan, pay lots of interest and or book a meeting with the ‘Bank of Mum & Dad’ and beg them for a loan.

Luckily, my parents were willing to lend me the money to buy a new car and today as I rolled out of the dealership in my brand new, super shiny and very sleek new car I am so excited to go meet up with my friends and finally tell them all about my epic adventures! Now I just have to worry about making my repayments to them, but thankfully I don’t have to worry about that as Credi keeps on top of it all and makes it super simple for both me and my parents to stay informed and on top of the finances at all times!


Written for Credi Pty Ltd by Alexandra Rough


family loan agreement template



Learning how to adult and sometimes asking for help


Written for Credi Pty Ltd by William Moore

Why should we learn how to adult? I look at today’s youth and often think that the housing affordability crisis, coupled with a lack of education has resulted in a generation without financial literacy.

The current prices of housing in comparison to annual income in Australia has been the cause of much of the public debate in recent years.

The topic has fuelled loud and vitriolic voices on both sides of the argument with strong stances on the causes, the symptoms and whether the crisis even exists at all.

This issue has hit Australian youths more than anyone else. They have had to deal with it on top of increases in education fees and the cost of living. It’s just a confusing world for young people to get a grasp of – plain and simple. Managing and gaining property, stock, and investments all require a level of financial literacy which many young Australians lack.

It definitely doesn’t help that there is a clear inadequacy of financial education in the high school education system, which I believe is imperative to help young adults manage their finances and challenges that often arise in adulthood.

Terms of negative gearing certainly don’t have much to do with cars, and a housing bubble doesn’t sound like it means much either.

Studies surrounding Australia’s housing crisis have shown another symptom for young people, borrowing from family. With little in the way of capital, young people have been increasingly borrowing from their property-owning folks in order to get by.

Borrowing from our parents also known as the ‘bank of Mum and Dad’is having an adverse effect on the country’s economy, in a number of both positive and negative ways. Although beneficial for children whose parent’s are well off, it proves to put children whose parents can’t or simply won’t lend to them at a disadvantage.

All of that aside, borrowing from Mum and Dad doesn’t have to rob young people of their chance to learn valuable financial life skills.

Companies like Credi allow young people to approach their parental loans with a comparative level of financial legitimacy that they would through a commercial lender. The platform helps young people draft up loan agreements, providing them with peace of mind while also educating them in the process.

So check Credi out if you’re wanting to properly manage and formalise loan agreements you have with a family member or a friend. With Credi, it’ll help you wrap your head around the realities of managing your finances, and maybe you’ll even pick up skills and build on your knowledge of finance.


Written for Credi Pty Ltd by William Moore




The platform helping empower the ‘bank of mum and dad’ –


Tim Dean talked with Annie Kane from earlier this year and discussed Credi’s potential to help struggling millennials who turn to their parents for a loan to buy their first property.

The online platform for managing loan agreements between family, friends, and colleagues has seen great success since their launch in April. Credi has grown exponentially in the Australian market and as of this month has reached $31 million dollars of loans on the platform. Tim Dean further mentions how the platform was created after he

CEO Tim Dean further mentions how the platform was created after he experienced the strain of not being repaid and having to constantly chase up family and friends. As such, Credi aims to formalise and manage lending between family and friends by providing loan documentation, negotiation of an agreement, repayment reminders and ongoing loan management.

Dean also highlighted that 1/3 of the loans on the platform are property related, whether it be for a deposit or for a house purchase.

Tim Dean further goes on the discuss the gap between homeowner equity owners and millennials, and how more and more millennials are having to turn to family for financial help. He further mentions how many millennials prefer not to turn to banks due to the high-cost credit and higher interest rates. That’s when young adults look to their family for help, specifically ‘the bank of mum and dad’.

Mr Dean added: “But the problem some parents have is lending their money to their children without guarantees. They might be concerned that their child hasn’t got a job, or they want to protect their wealth for estate planning, or concerned that they might never get that money back for when they need it later in life. That is where we aim to help.”

Read the article in full here!


Credit: Annie Kane





Spending Can Be Saving – How to Avoid Excess Student Debt

student debt

Written for Credi by Sarah Dyce

So no one loves the idea of spending tons of money when it’s not necessary right? But there are some serious benefits to paying off your student loan now to save yourself some money in the future.

Now be honest, I bet I’m not the only one who doesn’t pay a lot of attention to their uni fees. But trust me, it’s something worth looking at.

The first time it caught my attention was when I booked my flights for a holiday. I had been saving for months and was so excited to get away! But just as I was about to finalise my tickets the payment choices included a loan option (strange I know) rather than paying by credit card. I thought about it for a moment, thinking that one loan was more than enough for me – I didn’t want to live in debt! In the days following, I started to think about the debt that I already had, and my student loan came back into focus for me for the first time in a long time. I’m sure I’m not the only one who has dismissed that as being ‘taken care of’ and something that ‘I’ll deal with when I graduate.’ Well I wish that I had paid closer attention because I could have saved myself a lot of stress and money.

Student loans, there are plenty of options depending on what uni you go to and what degree you study, but at 17 I was not considering the consequences when I applied to put my degree on FEE-HELP. It just wasn’t something that overly concerned me and I followed along with the consensus with my peers; as long as I didn’t have to pay upfront I would just deal with it later. I never expected that booking flights would be the catalyst to enlighten me of my mistake.

What is FEE-HELP and the other important things people forget about

FEE-HELP is essentially a ‘student loan option for those paying full fees, often those at a private institution or studying postgraduate courses’. But what often gets overlooked or forgotten is that students studying undergraduate courses at approved providers incur a 25% fee onto their loan.

Don’t get me wrong; I think offering students a way to gain an education while not having to pay upfront or in full is amazing – it opens the doors to so many people and allows them access to a higher education they otherwise would not have been able to afford. But, like me I’m sure, plenty of these students aren’t aware how high the inflation is on their fees as each quarter passes.

Did you know that each year on June 1st your overall debt is taxed and adjusted for inflation? Although this percentage has decreased since previous years, it’s still adding on an additional 1.5%*, which may seem insignificant, but when you look at the long-term implications of much this will cost you, you may want to pay closer attention. 

Meet Alex

To make things a bit clearer, let’s put that in context, here we have Alex.

Alex is studying a Bachelor of Commerce at a public university and is expected to graduate with about $35,000 of debt. Each semester Alex has the option to repay some of her loans or keep putting it onto FEE-HELP. Given the degree she is studying, Alex has about $5000 per semester in unit fees.

This $5000 a semester once indexed at 1.5% becomes $5,075 (an additional $75). This $5,075 then gets joined by next semesters $5000 ($10,150 in total) which then gets indexed again at 1.5% and so on and so forth etc. and all that.

So by the end of one year of study, Alex went from an expected $10,000 for unit fees to $10,150.

$150 to access tertiary education for a year is a fairly good deal, but it’s what happens next that can catch a lot of people out.

Remember Alex? She decides to switch universities and is now studying at a private provider where her debt will be subject to a 25% fee before it gets to the point of indexation. Alex now pays $12,500 in total for the year, instead of just $10,00 for the unit fees. What this means come time for indexation is that Alex will pay 1.5% of $12,500 not 1.5% of $10,000. Not only will Alex pay more to defer her fees, she pays more each year as the debt is indexed.

Obviously more factors would play into this in real life, not all units cost the same, sometimes scholarships are available, etc. But this is just the money needed for unit fees using the FEE-HELP system; this number doesn’t cover any textbooks, university administration costs, travel costs, cost of living and plenty of other expenses that university students fork out each semester.

Taking a Closer Look

All of this information altered the way I approached university. It made me much more aware of the implications that some of these government schemes entail. If you’re like me and would prefer not to fork out the hypothetical $2500 extra a year, then the next few things should be helpful to you.

  • Be proactive
    • It is never too late to look at your fees and your repayment options, 1st, 2nd, 3rd year? Doesn’t matter! Take a closer look at your FEE-HELP account to see if there is anything you could be doing to save yourself some money in the future.
  • Research
    • Yes, not the most fun in the world but researching your alternative to a government loan can be constructive if you want to prevent unnecessary fees in the future. There are plenty of websites and non-profit organisations both online and in person where you can go and discuss the options that best suit you and your needs.
  • There are plenty of other options
    • FEE-HElP is just one of the options available to assist with university fees, there are various other options depending on your degree and needs, some of these include;
      • Banks
      • Personal loans
      • Scholarships
      • Company grants
      • Mum & Dad
    • Keep an eye on the news
      • Watch out to see if there are any developments in policy changes relating to student loans
      • The government previously had a matching scheme where they would contribute you your debt if you made a voluntary repayment
      • Sadly this was removed at the beginning of 2017, but with the state of Australian government whose to say something else won’t pop up?

The Bank of Mum & Dad

After I had looked at all my options, I found the best way forward for me personally, was to take out a loan from Mum and Dad. A lot of the websites I looked at were talking about how my future employer would take a chunk of my pay and put it towards repaying my debt, which got me thinking, why can’t I do that with my parents?

A long discussion later, I organised with my parents an alternative way to cover my uni fees rather than FEE-HELP. Similar to the future employer scheme, my parents would pay my units in full (with the aim to avoid any excess debt), and in turn, I would contribute a percentage of my weekly pay to repaying them.

By organising my method of payment for uni, while yes, it does mean that for now, I have less money to add to my savings. By the time I graduate, and *fingers crossed* enter the workforce with a real job, all of that paycheck will be coming to me, not to the government.

There are some amazing websites and people out there who can help you find an alternative to FEE-HELP, one of those gems is ‘Credi.

Credi is an online platform ‘powering the bank of Mum & Dad’ as they say, which in its essence is simplifying lending between family and friends by assisting in building a loan, negotiations, contract, and repayment method. All taken care of for you! The best part; it’s FREE!  That’s right, you heard me, FREE! No need to pay any accountants or lawyers, no having the fact your parents pay for uni thrown in your face every argument, all taken care of in a nice little package for you.

Learning From My Mistake

This is the stuff I wish I had of known when I first started uni, not now I’m already in debt, but please learn from my mistakes!It’s always worth discussing with a financial adviser to ensuring you are maximising your dollar not delving further into debt than necessary. Don’t just brush it off for future you to deal with, I’ve been that person and trust me I am not happy with my past self for it!

It’s always worth discussing with a financial adviser to ensuring you are maximising your dollar not delving further into debt than necessary. Don’t just brush it off for future you to deal with, I’ve been that person and trust me I am not happy with my past self for it!

For more information on student loans, check with your institution about payment options to see what it is available for you. Discuss it with Mum & Dad and don’t’ forget organisations like Credi are there to lend a hand if things get confusing!

Happy saving everyone!


Written for Credi Pty Ltd by Sarah Dyce


Credi Loan Agreement and Repayment Management


Credi’s #WhatTheLoan – Support their growing family

We all lend to family and friends in need. #WhatTheLoan is back again. Recently we had a parent lend to their adult child who needed a loan to support their growing family. Do you have any loan stories to share?

Empowering The Bank of Mum and Dad


Family loan repayment template