Know your rights

Before you sign up to a loan

  • When choosing a loan make sure you do your research and shop around.
  • Lenders must make their interest rates, fees and terms publicly available to help you to shop around and make a decision about the loan that is right for you.
  • You have a choice, for example if you are buying a car you don’t have to take out the loan at that car dealership.
  • Lenders must ask questions to make sure you can afford the loan and it is suitable for you.
  • You will need to provide your lender with information proving that you can afford to repay the loan while still covering day to day living expenses. Collect together the information you need and be ready to answer your lender’s questions.
  • When thinking about getting a loan make sure you know your rights and obligations – read ‘Signing up to a loan’.

What you can expect from your lender

  • Lenders must give you key information about the loan including annual interest rates, fees and the total amount you will pay over the life of the loan, before you sign the contract.
  • Make sure you think about the information your lender gives you before you sign up. You can ask your lender to clarify, take more time to think about it, shop around or get some independent advice.
  • Your lender will need to be satisfied it’s likely you can pay your loan back and still have money left over for essentials such as rent/mortgage, food and power. Think about what might happen if something unexpected comes up – will you still be able to pay back the loan?
  • When thinking about getting a loan make sure you know your rights – read ‘Signing up to a loan’.

When you need a guarantor

  • A guarantor is someone who is prepared to pay off your loan if you are unable to do so.
  • It’s great to be able to help our friends and family by being a guarantor, but a guarantor needs to make sure they would be able to pay back the full amount of the loan if the borrower can’t.
  • Lenders must make sure that like borrowers, guarantors have all the key information about the loan before they sign up and that they understand what they are committing to.
  • Guarantors have the same rights as borrowers – make sure you read ‘Signing up to a loan’.

What to do if you have a problem

  • If you are struggling with your repayments, it is important to get help quickly:
  • If something unexpected happens (eg, you get sick or lose your job) and that makes it hard for you to pay your loan, you may be able make a hardship application. If the application is accepted, your lender can change the terms of your loan (eg, extend the term of the loan and reduce the monthly/weekly payments).
  • If you fall behind in your payments and you think you need to make a hardship application, you need to get onto it quickly and apply within the allowed timeframe.
  • To find out if you qualify to for hardship and to find more information read ‘Problems with your loan’ or the Commission’s hardship fact sheet.


  • In the event you don’t make your repayments your lender may be entitled to take and sell some of your property to pay your loan. This is called repossession. There are rules about when a repossession agent can visit your property to repossess items.
  • Repossession agents can only take items that were listed as security in the loan contract, so think carefully about what you list as security when taking out a loan.
  • Household necessities such as beds, fridges, medical equipment and washing machines as well as important documents such as passports and bank cards cannot be used as security or repossessed. The only exception to this is where the loan was taken out specifically to purchase that item. For example if you got a loan to buy a bed then that bed can be repossessed.
  • To find out more about repossession read ‘Problems with your loan’.