Catholic charity Good Shepherd NZ and the BNZ say from now on all Good Loans will be interest- and fees-free.
A partnership between the bank and Good Shepherd NZ is making the major policy change possible.
In one loan option, the BNZ is supporting interest-free Good Loans of up to $7,000 to eligible families and individuals.
Their aim is to help those on limited incomes avoid predatory lenders and high-cost debt.
The money can be used to pay for essential items or services – new household appliances, computers, car repairs or medical expenses, for instance.
Another option is the DEBTsolve programme. With this, the bank is also supporting Good Shepherd NZ’s offer of interest-free Good Loans of up to $15,000.
DEBTsolve combines debt coaching and advocacy alongside interest-free debt solution loans. The goal is to help more New Zealanders get on top of unmanageable debt.
People’s financial circumstances can be fragile, says Good Shepherd NZ Chief Executive Fleur Howard.
“Sometimes all it can take is an unexpected event, like their car breaking down, to tip people from just managing financially to being under a significant amount of financial stress,” she explains.
“These households may have been forced to turn to high-cost lenders, exacerbating their financial difficulties and creating a spiral into further debt.
“Through Good Loans, we want to continue reducing barriers and increasing access to fair and affordable lending for essential services and products for the growing number of families and individuals who need this support.”
Having an account with the BNZ isn’t a requirement. The free Good Loans are available to eligible New Zealanders on limited incomes.
Why the policy change?
Until now, interest-free Good Loans have been available only for amounts up to $2,000. Good Loans of up to $15,000 attracted a low-interest rate of 6.99 per cent.
“We know there are families and individuals on limited incomes out there struggling, who need a hand to take some of the pressure off,” says BNZ CEO Dan Huggins.
“That’s why, together with Good Shepherd NZ, we’ve announced these changes to help families and individuals when they need it most.
“Supporting interest-free Good Loans is part of our commitment to support the long-term wellbeing of New Zealanders by helping them avoid predatory lenders and unmanageable high-cost debt.”
Since 2014, BNZ, Good Shepherd NZ and community partners have provided just under $12 million in no- or low-cost lending to over 4,000 families.
They estimate they’ve saved customers over $6 million in fees and interest had they borrowed from high-cost lenders.
BNZ has committed to delivering $50 million in no or low-interest loans and advances. It’s part of its wider sustainability strategy to grow all New Zealanders’ long-term social and financial well-being.
Good Loans are also supported by the Ministry of Social Development.
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