When you apply for a loan, we have some responsibilities to you. We need to make sure we understand your situation and your needs. The below explains in plain English, what we will do to help you and make sure you don’t get a loan that you can’t repay.
To view the full Responsible Lending Code which we must adhere to, click here.
- Make reasonable inquiries before entering into a loan (or taking a guarantee) to be satisfied that:
- The credit provided will meet the your needs and objectives
- You and your guarantor (if any) will be able to make the payments under the loan, or comply with the guarantee, without suffering substantial hardship.
- Help you and your guarantor (if any) to make informed decisions
- Help you decide whether to enter into the agreement, agree to variations or any later decisions and to be reasonably aware of the contract’s effect by making sure:
- Advertising is not likely to be misleading, deceptive or confusing to you
- The contract’s terms are expressed in plain language in a clear, concise and intelligible way
- Information is not presented in a way that is likely to be, misleading, deceptive or confusing.
- Act reasonably and ethically:
- When breaches of the loan occur or when other problems arise
- If you suffer unforeseen hardship
- During repossession including:
- Taking all reasonable steps to ensure goods and property are not damaged
- Adequately storing and protecting repossessed goods
- Not exercising the right to enter premises in an unreasonable manner.
- Not use oppression in dealings with you:
- To ensure contracts are not oppressive and our powers are not exercised in an oppressive manner
- You are not induced into contracts by oppressive means.
- Comply with all of their other legal obligations to borrowers. This includes:
- Following the rules about disclosure, credit fees, unforeseen hardship applications, and credit repossession in the Credit Contracts and Consumer Finance Act
- Not making false or misleading representations or including unfair contract terms as required by the Fair Trading Act
- Carrying out their services using reasonable care and skill, as required by the Consumer Guarantees Act
What We Expect From You
When you apply for a loan, you have some responsibilities to us. You need to make sure we have all the information we require to understand your situation and your needs. The below provides useful advice for what you as a responsible borrower can do to help.
Work Out Your Budget
You must be certain that you can afford the loan repayments.
Your budget lists your income and expenses, and shows if you have a deficit or a surplus. It includes both regular
and occasional items.
By making a budget showing your current income and expenses, you can see if there’s any room for additional expenses like loan repayments.
If your current budget shows a deficit, then a loan is not the answer.
Look at All Your Options
You should investigate whether there are other ways to meet their needs.
A loan might not be the right answer.
For example, if you want to buy a car, think about: other forms of transport, rescheduling your appointments, or a smaller vehicle like a scooter. Think about these all things before buying a car on credit.
Another example: If you want to buy something that’s not urgent, think about saving up and buying it later.
Work and Income will sometimes advance small amounts to people on a benefit, to cover essential items. They recover the advance slowly, without interest.
Find Out More About It
You must be sure what you’re signing.
You might need someone else to help explain it to you – a translator or budget adviser, for example. Look out for details on the total cost of the loan, including administration fees and what penalty fees could apply.
Provide True and Accurate Information
To assist us, you should provide all the information we need to make an informed lending decision.
We will ask you questions about your ability to repay, and may ask for things like bank statements, payslips, proof of debts, etc.
You should not hide relevant information from us, or mislead us in any way.
Keep Us Informed
Unexpected life events can make repayments difficult. Talk to us when this happens. You may have Credit Related Insurances which may help you if you have lost your job or become sick. Have a quick look at your Loan Contract to see if you took this type of insurance out when you originally got finance with us. In conjunction with this, you might need to ask about our hardship provisions and talk to a budget adviser about your options.
Being Responsible When Selling Credit-Related Insurance
We sell Consumer Credit Insurance (CCI), Guaranteed Asset Protection Insurance (GAP), Mechanical Breakdown Insurance (MBI) and Comprehensive Motor Vehicle Insurance (MVI).
These insurances may be required as a condition of your loan approval, however you are free to purchase suitable cover from any supplier.
When any Credit-Related insurance is arranged, we have to:
- Make reasonable inquiries before an insurance contract is signed
- Ensure the policy is likely to meet your requirements and that payments will not cause substantial hardship.
We can rely on information you provides, unless the we have reasonable grounds to believe the information is not reliable.
- Assist you to make informed decisions about buying that insurance and to be reasonably aware of the full implications of doing so. This includes making sure:
- Any advertising distributed by us is not likely to be, misleading, deceptive or confusing to borrowers
- Information is not presented in a misleading, deceptive or confusing manner
What if You’ve Been Declined?
If we have declined your loan application, it’s because we don’t believe it would be responsible to provide you with a debt you may not be able to repay.
Talk to someone independent
Sometimes it’s hard to step back from your own finances and see the big picture. When you feel like this, it’s important to talk to someone independent – not another money lender.
We suggest you talk with a budget adviser, who will offer free, confidential and non-judgemental advice. We have more than 160 budgeting services around the country. Find your nearest service by contacting:
0508 BUDGETLINE (283 438)