The NZ government is amending the Credit Contracts Legislation Amendment Act to protect vulnerable borrowers from high-cost loans that can trap them in debt. The changes were due to start on 1 June 2020.
The improved protections include:
- If you buy from high-cost lenders, you need not pay anything more than the 100 per cent of the loan principal.
- No compound interest applicable to high-cost loans.
- Defaulting payments fees will be limited to NZD 30, conditions apply.