QFA Financial Advice study materials
QFA Financial Advice study resources

QFA Financial Advice: Consumer Credit & Associated Insurances

QFA Financial Advice · Work through your exam, one topic at a time.

All guide sections

Consumer Credit & Associated Insurances

Core concepts

Consumer credit questions test APR/APRC, credit agreements, hire purchase, personal loans, credit cards, overdrafts, and payment protection insurance (PPI). Know total cost of credit, early settlement, default, arrears, and cooling-off rights.

Understand secured vs unsecured lending, credit referencing, and affordability assessments. Know the Consumer Credit Act-style protections: pre-contract disclosure, right to withdraw, and complaint/ombudsman routes. For associated insurance, know PPI (covers repayments on illness/unemployment) and short-term income protection.

Traps

  • Confusing APR (annualised rate) with monthly rate.
  • Assuming PPI is compulsory - it is optional and often mis-sold.
  • Forgetting early settlement may include a rebate or charge.
  • Mixing secured (asset-backed) with unsecured lending.

Rule of thumb

Compare loans using APRC, not the headline rate - APRC includes fees and the true cost of credit.

Worked example

A €10,000 loan over 3 years at 8% APR costs more than the same loan at 8% with a €300 arrangement fee - the APRC captures that difference.