Changes to consumer lending and what this means for customers
02 December 2021
Changes to the Credit Contracts and Consumer Finance Act (CCCFA) come into effect on 1 December 2021. These changes have been made by the Ministry of Business, Innovation and Employment (MBIE) to further protect consumers when they apply for a new loan or make a material change to an existing loan.
These changes strengthen the lender responsibilities under the CCCFA by extending what a lender must do around ensuring that a loan meets a customer’s needs, that customers can afford the loan repayments and that customers are making a properly informed decision.
These changes apply to all credit applications from home loans, credit cards and personal loans through to store credit for appliances and vehicle loans. Customers who want to make changes to existing loans, such as taking a mortgage top-up or increasing their credit limit, will also need to provide additional information.
What does this mean for you as a customer applying for a new loan?
To help ensure that loans are affordable, all lenders will be required to collect more detailed information about your financial situation, including about your income, debts, and expenses. You will also be required to provide bank statements or other proof of income and expenses (such as invoices and payslips). To help ensure that loans are suitable, lenders will need to make more detailed inquiries of you about the loan, your requirements and objectives in taking out the loan.
With the additional information you will be required to provide, and the work lenders need to do to check all the information is correct, the process of getting a new loan may take a little longer.
How getting a loan with UDC is made easier
At UDC we want to make sure our customers enjoy a smooth, easy application process and that we can provide the right answer as soon as possible. To help make the process as smooth as possible, you have the choice of applying online, by phone or through our network of accredited dealers. Regardless of how you choose to apply, you’ll be taken through the process step-by-step so that everything needed for your application is captured.
Then when the time comes to provide proof of income and expenses as required by the CCCFA, UDC customers have the choice of using our online tool, Bud, or emailing copies of their bank statements (or other evidence) to UDC.
We take our obligations as a responsible lender very seriously and work hard to ensure our customers can afford their new loan. But we also understand how exciting buying a new car can be, so we want to make the process as easy for you as possible along the way.