Borrowing safely: New Zealand.

A take-home sheet for people at the session. Other countries: United States · United Kingdom · Canada · Australia · India · Philippines.

Moraph for Good · Fluent

Borrowing safely: New Zealand

Handout · moraph.org/commons/sessions/fluent/borrowing-safely

The cost of a loan is everything you pay back, not the monthly payment. This sheet has the questions to ask before you borrow and where to get free help where you live.

Three questions for any lender

What is the yearly rate including fees?
What is the total I will pay back?
What happens if I pay late or early?

Warning signs

Pressure to sign today
No questions about whether you can afford it
A fee before you get the loan, which is often a scam
A lender that wants to keep your ID or bank card

Cheaper options to ask about

Small loans from credit unions or community lenders
A payment plan with the company you owe
Free, not-for-profit debt advice

If you’re struggling

Contact the lender before you miss a payment
Complain in writing, and keep copies
Use the official routes below if it isn’t resolved

In New Zealand

Lenders must lend responsibly. Under the Credit Contracts and Consumer Finance Act (CCCFA), lenders must check that a loan is suitable for you and that you can likely make the repayments without substantial hardship. Before you sign they must give you key information in writing, usually in a disclosure statement that lists all fees.
Limits on high-cost loans. For high-cost loans (annual interest of 50% or more), lenders can’t ask you to pay back more than twice the amount borrowed, can’t charge more than 0.8% of the unpaid balance a day in interest and fees, averaged across the loan, and can’t charge compound interest.
Check the lender is registered. Lenders must be on the Financial Service Providers Register and belong to an approved dispute resolution scheme. Unregistered lenders can’t make you pay interest, default fees and other costs of borrowing.
Hardship. All lenders must have a hardship process if an unexpected life event, such as losing your job or serious illness, makes repayments hard. Apply in writing as soon as you can; there are time limits. The lender must give its decision and reasons within 20 working days and can’t charge a fee to consider the application.
Cheaper help to ask about. Work and Income can help with some unexpected costs, such as car repairs or dental treatment, and some of these payments don’t have to be paid back. You don’t have to be on a benefit to qualify.
Complaints. Complain to the lender first; if you can’t agree, its financial dispute resolution scheme is free and independent. Since 1 July 2026 the Financial Markets Authority (FMA) has regulated consumer credit law, taking over from the Commerce Commission.

Official places to check:

Consumer Protection (Ministry of Business, Innovation and Employment): www.consumerprotection.govt.nz/help-product-service/borrowing-money/what-lenders-must-do
Consumer Protection (Ministry of Business, Innovation and Employment): www.consumerprotection.govt.nz/help-product-service/borrowing-money/loans-and-lenders
Consumer Protection (Ministry of Business, Innovation and Employment): www.consumerprotection.govt.nz/help-product-service/borrowing-money/payment-problems
Consumer Protection (Ministry of Business, Innovation and Employment): www.consumerprotection.govt.nz/help-product-service/managing-money/how-to-complain-about-your-financial-service-provider
Commerce Commission: www.comcom.govt.nz/business/transfer-of-responsibility-for-regulation-of-consumer-credit

More free official help in New Zealand: moraph.org/commons/help/financial-literacy/nz

General information, not advice about your own situation. Checked 20 October 2026. If an official source says something different, it is right. Free to copy and adapt. moraph.org/commons/sessions/fluent/borrowing-safely