RESPONSIBLE BORROWING & LENDING
The Responsible Borrowing Code is for anyone thinking of taking out a loan or entering into a credit contract.
82% of New Zealand families have debt of some kind, and collectively we spend more than we earn. These guidelines will help you avoid penalties, repossession, stress and heartache.
It establishes minimum expectations for New Zealanders considering a loan or credit contract.
Take a look at the Responsible Borrowing Code here.
As a lender we have an obligation to lend responsibly. Take a look at the Responsible Lending Guidelines to understand what you should expect from your lender when you are borrowing money.
In New Zealand, lenders are regulated by the Credit Contracts and Consumer Finance Act and guided by the Responsible Lending Code. Ubuy takes its obligations as a Responsible Lender seriously and abides by “The Responsible Lending Code”. The Code can be viewed here: Responsible Lending Code (June 2017) Before approving an application for credit, Ubuy has a duty as a responsible lender to make “reasonable enquiries” that the loan is suitable in that it meets the borrower’s “needs and objectives”, and that the borrower or guarantor* can afford to make the payments without suffering substantial hardship. The ultimate goal is to ensure customers are not signing a loan contract that they cannot afford.
These Lender Responsibility Principles are governed by the Credit Contracts Finance Act (CCCFA) and are enshrined in the Responsible Lending Code which offers guidance to lenders on how to uphold the principles.
The Responsible Lending Code can be downloaded from the Consumer Protection Website:
The Commerce Commission provides a detailed explanation of the Lender Responsibility Principles:
Our responsibility to you
When you apply for credit to purchase from us, we have some responsibilities to you, these include that we understand your needs and your situation. This will allow you to make an informed decision about your purchase and rest assured all information provided will be kept confidential.
Ubuy is a responsible lender and we’re completely up-front and transparent about our credit services, what it will cost you and what’s involved.
As a responsible lender we would firstly encourage any borrower to look at alternative options before applying for high interest credit. Our services are designed for those who fall outside the traditional credit criteria of the big banks.
If you are already in debt, we would advise you not to apply for a purchase on credit with Ubuy. This will only increase your financial responsibilities. Talk to the Citizens Advice Bureau or get budgeting advice from a service like www.sorted.org.nz or one of the other services mentioned at the bottom of this section. Please do not borrow more than you are able to borrow and repay responsibly.
Depending on your circumstances the sort of information we may request from you is as follows:
- Your personal circumstances including your age
- What existing loans you have and whether they will be repaid with this loan
- Recent bank statements to confirm your income and expenses
- Whether your employment is full, part time or casual
- What assets you have and their value
- Details of your credit history and your consent to a Credit Check
- Requesting to see your identity documents (drivers licence / passport etc)
To understand your needs, we may also ask the following:
- The amount you would like to borrow
- When you require the product(s)
- The purpose of the purchase (gift, personal use)
- The loan term that best suits your needs / budget
It is very important to us that you understand your contract and we endeavour to do the following:
- Make sure you know your rights and responsibilities before you sign the Credit Contract
- Have clear terms and conditions that are easy to understand
- Ensure you understand the Interest Rate & Fees that apply to your Credit Contract
- Clearly specify any security being used and ensure you are aware of this
- That you understand what may happen in the event of non payment (repossession or sale of any property that you have provided as security)
- Give you this information at the time you apply and have details on our Website
You’ll need to be able to show that you’re responsible with money and can pay off what you borrow. We’ll look at things like:
- your income
- whether you pay your bills on time
- whether you save any money
- whether your wages are regularly paid into your account
- whether you have any other debt
- your credit rating.
We do our utmost to ensure our loans are fair and reasonable via our responsible lending practices:
- You may be able to borrow between $100 and $500 on your first loan and up to $1,000 on subsequent loans, subject to our lending criteria.
- Our criteria requires you to be in ongoing employment and earn over $400 per week net.
- We ensure that you never have to repay more than 25% of your net pay each pay period to ensure you can afford to repay your loan.
- New regulations require us to ask you for the purpose of the loan. As a responsible lender we may not accept your reason as a sufficient purpose to approve your loan.
- We are transparent about the interest charged and all the fees applicable which are set out in our costs of borrowing.
- We provide an easy to use loan calculator that helps you calculate how much you can borrow and exactly how much it will cost, how much interest you will pay, the amount of fees, the number of repayments and the full repayment amount.
- The team at Ubuy are committed to the practice of responsible lending and do not want to keep you in debt. We want you to repay your loan quickly and we aim to only lend to people who we believe can afford to repay us as agreed.
Assessing loan affordability
At Ubuy we are firmly of the view that loans do not go bad, rather, they start bad. Therefore, we undertake reasonable enquiries to verify your financial situation. We do this in order to make a responsible assessment about the suitability of the contract for you and the affordability of the loan.
Varying loan amounts are available with the Ubuy Mini loan ranging from $100 to $600 over 2 to 43 days, and the KickStart loan ranging from $1,000 to $3,000 over 3 to 14 months. We only lend to those customers that we believe have the means to repay the loan as agreed.
- As part of our commitment to responsible lending, customers need to be in permanent employment in order to obtain a loan from Ubuy.
- The amount of money we lend is based on your income. This is because we want you to be able to repay your Ubuy loan as soon as possible and it is important that you do not borrow more than you can afford. You need to meet our minimum income test of $400 net income per week.
- Use our online loan calculator to determine how much you can borrow.
- At Ubuy we calculate the total amount repayable for you upfront.
- We also make you fully aware of the annual interest rate (AIR) applicable to the Mini loan and KickStart loan in our Interest and Fees section of the website. Although we aren’t obliged to show this on our website, we do so because we want to be upfront with you. The AIR is an annualised measure and doesn’t actually represent the true cost of a Ubuy loan, taken over a period of less than 12 months. To find out more, read the Interest and fees section of our website.
- Our system allows us to provide continuous disclosure regarding your outstanding loan balance (i.e. the amount that, if paid today, would settle the loan) and how to repay the balance. You can repay early and, if you do, then you will save money.
- If costs increase, it’s because you’ve failed to honour your loan agreement. Please refer to the Interest and fees section of the website for further information on our default fees.
- At Ubuy we reserve the right to run a credit check. We do this as part of our assessment of the suitability and affordability of a loan for you.
- Our commitment to responsible lending practice means we aim to only lend to those who can afford to pay us back on their repayment date(s) as agreed.
- We know a few past mistakes can lead to a bad credit history. Therefore, if you have a bad credit rating we may still lend to you. We take your overall financial situation into account, which includes conducting a full bank statement assessment to derive our loan decision.
Are you a responsible borrower?
- While it is important when applying for a line of credit to choose a company that practices responsible lending, it is just as important to make sure that you use your Ubuy loan responsibly.
- Your Ubuy loan is a financial commitment. Please check you are in a position to afford your repayments now and in the future. Ubuy’s loans are short to medium term, therefore the cost of your loan will be higher than the cost of a longer-term loan.
- Ubuy’s Mini loan should only be used to meet short-term cash needs, and not be used as a continual source of credit. This type of credit is not intended to meet your long-term financial needs.
- If you are concerned you are falling into a bad debt situation, then please do not apply for a Ubuy loan as our loan may only worsen your situation.
- Click here for the Responsible Lending Code.
- Our website provides access to a free budget service, which provides guidance on budgeting tools. We strongly advise that you think carefully before applying for a Ubuy loan, because we expect it to be repaid as agreed. We describe the potential consequences of failing to repay as promised in our Help and Interest and fees sections of the website.
- If you are concerned about long-term debt, then please do not apply. To help manage your debt you could contact the Citizens Advice Bureau.
- Your Ubuy loan is a financial commitment. Please check you are in a position to afford your repayments now and in the future. If you are concerned you are falling into a bad debt situation, then please do not apply for a Ubuy loan as our loan will only worsen your situation.