Credit Law changes from 1 Dec 2021

Key changes to Credit Law that came into force from 1 December 2021 are –

  • Lenders will no longer be able to rely solely on the fact that information has been provided by the borrower to show that they have made reasonable inquiries about the affordability and suitability of loans
  • Introduction of minimum advertising standards and requirements for affordability and suitability inquiries
  • Lenders must keep records demonstrating compliance with their obligation to undertake affordability and suitability inquiries
  • Lenders will need to take reasonable steps to provide information about the loan to borrowers in the same language as they advertise in
  • Lenders under HCCCs must prominently disclose in print and internet advertising prescribed information about disputes resolution and financial mentoring services
  • Advertisements for HCCCs will be required to include a prominent statement that a HCCC should not be used for long-term or regular borrowing, and is only suitable for temporary, short-term cash needs
  • Lenders must make disclosure to borrowers when they start debt collection
  • Lenders must keep records demonstrating that their fees are reasonable and review their fees if there is a material change that is likely to affect the reasonableness of the fee
  • New obligation to undertake affordability and suitability inquiries before making “material changes”

Lenders will make Dealers comply with the rules introduced from 1 December 2021.

Advertising Finance

The Law, Lenders must ensure their advertising is stated in plain language in a clear, concise and intelligible manner.

From 1 December 2021, lenders must:

  • provide key information about their loans in the same language used in their advertisements within the last 6 months if:
    • the language is different to the language used in the loan agreement, and
    • the steps are necessary to ensure the borrower and/or guarantor can make an informed decision about the loan agreement and/or guarantee
  • not advertise using language that suggests no questions will be asked, or borrowers’ circumstances will not be considered, for example ‘no credit checks’ or ‘bankrupts OK’
  • state any mandatory fees if advertising interest free contract terms
  • state that responsible lending criteria will apply if advertising approval speed in minutes or hours, and
  • display the total price, if known at the time, if the advertisement states a regular payment amount, for example $20 a week.

Add-on products are generally taken out at the time the loan is entered into; examples include repayment waivers, mechanical breakdown insurance, guaranteed asset protection insurance and payment protection insurance.

Lenders must:

  • make sure the add-on products are affordable and suitable – the Regulations prescribe the inquiries the lender must make
  • assist borrowers to make informed decisions about their purchases
  • refund the unused portion of add-on products if the loan is repaid early in certain circumstances, and
  • from 1 December 2021, maintain records about how they assessed their borrowers’ add-on products for affordability and suitability. Those records must be made available upon request to the borrower or their representative for free within 20 working days.

Finance Application


  • Net income from any source after tax, KiwiSaver or other superannuation contributions, and other similar deductions



Any of the following:

  • fixed financial commitments, including accommodation costs, insurance, rates, body corporate fees, school fees, and child support
  • payments of any debts (this includes the new debt being considered)
  • living expenses, including utilities, food and groceries, personal expenses (including clothing and personal care), other costs associated with dependants if applicable (such as childcare), medical expenses, and transport expenses, and
  • any regular or frequently recurring outgoings eg, savings, investments, gym memberships, entertainment costs, or tithing etc that must be included to assess relevant expenses and that the borrower is unable or unwilling to cease after the agreement is entered into or materially changed.