If you have a mortgage, use a credit or store card, have a personal or cash loan or an arranged overdraft, or buy goods or services on credit, you have probably entered a consumer credit contract.
When you need to borrow money to buy a house or a personal item like a car or TV, get a credit card or sign up to a store card, it’s best to be prepared.
Everyone's experience with borrowing money will be different, but there are some things all borrowers will go through when getting a loan. Below we have set out some tips and important information for you to keep in mind.
A consumer credit contract is a contract between a consumer and a lender. If you take out a mortgage, sign up for a credit card, arrange an overdraft or take out a personal or cash loan – you have entered a consumer credit contract.
Your lender must meet a set of lender responsibilities to you throughout your loan. There are also certain things a lender must tell you before you enter into a loan.
It is a requirement for lenders who loan money to consumers and mobile traders that sell goods on credit, to be certified. The purpose of this is to provide New Zealand consumers with confidence that their lender(s) satisfy a high standard of personal and professional integrity.
Sometimes a lender will require a guarantee that a debt will be paid back by someone else if the borrower stops repaying the loan. A guarantor is someone who agrees to do this.
If you are facing financial difficulty and think you may struggle to meet your debt repayments you have two options. Either talk to your lender as soon as possible to see if they can make changes to your credit contract or, if you qualify, you can make a hardship application.
