Loans and credit

Take time before you sign any credit contract or loan agreement. It’s important to understand fees and charges, interest, your payment obligations, and what to do if you are behind in payments. MoneyTalks is a free helpline providing budgeting advice for individuals, family and whānau. Contact 0800 345 123 to talk to a trained Financial Mentor.

COVID-19: The Commerce Commission has issued guidance for lenders, including responsible lending principles, and responding to borrowers in financial stress. Access the guidance here. Contact the Commerce Commission: credit.advocacy@comcom.govt.nz

  1. Take time before you sign

    A rushed decision can be costly when borrowing money. It’s good to ask: “do I need to borrow the money?” Loans, and the paperwork that go with them, can be confusing. Make sure you ask questions about what you are agreeing to and what your payment obligations are.

  2. Work out how much the loan will cost you before you agree to it

    You can use the Sorted debt calculator to work out what the loan will cost each month and in total: www.sorted.org.nz. It’s also a good idea to talk to a Financial Mentor about your budget and how a loan will impact on your finances. MoneyTalks provides free budgeting advice to individuals, family and whānau. Contact 0800 345 123 to talk to a trained Financial Mentor.

  3. Check the fees and charges

    All loans will have fees and charges. Ask the lender to clarify all fees and charges over the full repayment period. The documents the lender provides should show these clearly. There can be break fees (penalties for paying off the loan early), fees for missing payments and administration fees.

  4. If you have money problems, talk to your lender as soon as possible

    As soon as you have an issue with the loan repayments, get in touch with your lender and discuss it with them. Lenders may allow you to extend the time or restructure your obligations to make them more manageable. MoneyTalks provides free budgeting advice. Contact: 0800 345 123

  5. There are laws to protect consumers when you borrow money

    The Credit Contracts and Consumer Finance Act (CCCFA) requires lenders to act responsibly, and ensures borrowers are able to make informed choices about what they are agreeing to. The Responsible Lending Code further explains lender responsibilities.

$4,000 vacuum debt written off image
Lenders must ask for information about the borrower’s ability to repay the loan under the CCCFA
Mrs B entered into a loan agreement to buy a $4,000 vacuum cleaner, sold to her by a door-to-door salesperson.
See the case summary
Three loans, no redundancy cover image
Lenders must ask for up-to-date evidence about a borrower’s ability to repay a loan
When Bev borrowed $17K for a car, she purchased payment waiver, but later discovered it didn’t cover redundancy.
See the case summary
Financial hardship, no evidence provided image
The CCFA has rules for lenders about hardship applications and fees.
After Dan took out a loan, he said money had been stolen from his bank, and he’d lost his job. But he had no proof.
See the case summary
35 unauthorised credit card transactions image
Failing to safeguard your credit card PIN could mean you are liable for unauthorised transactions.
Sharee complained that 35 unauthorised transactions were made with her credit card in NZ during the month she was overseas.
See the case summary

How can I find out how much I still owe on my loan and how this is calculated?

Write to your provider to ask for copies of statements showing payments and any fees or interest which has been applied. You should then check these statements to make sure you understand any fees or interest and that they record all payments you have made. If you need any help with this, your local Budgeting service or Citizens Advice Bureau may be able to assist you.

If you have any problems getting this information or disagree with the statements, make a complaint to your provider.

I’m behind in my loan payments, what should I do?

Contact your provider and explain your situation. You may be able to ask for a payment holiday.

You could also contact your local Budgeting service who provide free, independent and confidential assistance and can work with you to put together a repayment plan.

The fees/ interest that is being charged on my loan is too high; can the IFSO Scheme help me?

Check your loan agreement to see what interest rates you agreed to when you took out the loan. If you need any help calculating what the payments should be, contact Money Talks: moneytalks.co.nz

If you want to make a complaint, first make a complaint to your provider or call us on 0800 888 202 and we can help you with next steps.

The following sites may be helpful for further information or budgeting advice.

Money Talks: https://www.moneytalks.co.nz/
FinCap: https://www.fincap.org.nz/
... for Financial Capability: https://ccfc.org.nz
CAB: https://www.cab.org.nz/

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