Oxford blogs

You have probably heard a lot of talk lately around recent changes to the Credit Contracts and Consumer Finance Act (CCCFA), and the extra hurdles that have been put in place when applying for credit. Does this mean that it’s now harder to borrow? Well, maybe not….

To put it simply, the CCCFA is a consumer law that protects you when you want to borrow money. The Act sets out rules that we as a finance company must follow when lending money. The main aim of the Act is to ensure that each loan is suitable and affordable for the borrower.

Here we have listed some of the things our lenders look at when assessing whether a loan is suitable and affordable, and what you can do to ensure your finances are in the best possible shape before making an application for finance.

Things key things we look at:

• Your bank statements

We review your bank statements to determine whether or not you have the ability to repay your loan before providing finance. We check:

• Your incomings (E.g. Wages, salary) and your fixed outgoings (e.g. rent/mortgage, insurance, power, food and groceries etc).
• For any payment defaults
• What other debt you may have. i.e. credit cards, Buy now, pay later loans
• Your credit history
• Your employment status and history
• Your residential status

Things you can do before applying for credit:

• Keep a record of your expenses before applying for a loan, then create a budget that you can follow;
• Set up direct debits for your key bills. It can sometimes be hard to remember which bill is due and when, so direct debits are a great way of ensuring you are paying your bills on time. Any missed bills can impact your credit score;
• Aim to control your discretionary (non-essential) spending. Whilst we don’t focus on which fast food outlet you frequent, we are required to take these expenses into account when assessing your loan;
• Ensure any defaults are paid off before applying for credit;
• Aim to pay your credit card balance off in full each month;
• Be cautious about accepting buy now, pay later payment options. What initially looks like a small repayment each week does add up quickly, and will impact on how much you can borrow.

It can seem like a lot to take in, however it is important that you plan and budget accordingly so that your finances are in order when you’re ready to take out a loan. Remember, the CCCFA helps ensure that all parties are comfortable that you are not extending yourself beyond your means.

Please get in touch with our friendly team at Oxford if you have any questions around applying for finance.

We look forward to hearing from you.

There are a number of ways you can get a car loan, either from a car dealer, finance broker, or you can go to a lender directly. However, if it’s the first time you’re applying for a car loan it can feel a little overwhelming. So here we’ve compiled a list of steps to help you along the way.

Decide what type of car you want to buy
Take the time to consider your lifestyle and what you want to get out of your new car – Are you looking for a compact city run-around? A car with enough space to fit the kids and the dog? Or, perhaps you’re thinking an EV might be the best option when the cost of filling up the tank is getting more and more expensive every week.

Decide how much to you want to spend and how much can you afford to borrow?
It’s important to work out early on how much you are comfortable spending and borrowing. Take a look at your finances and work out a budget. Look at your income and expenses. Look at what you are currently paying on a regular basis, such as your rent, power or internet. How much is left over after all the bills are paid? Car insurance is another important factor to consider and will need to be included in your budget calculations. To give you an idea of what your loan repayments might be, check out our online Loan Calculator.

Apply for a loan approval with us
Once you’ve found a car, or decided how much you want to spend, you can apply for a car loan online. There are certain eligibility requirements you’ll need to meet before you begin:

• Be 18 years or older
• Hold a valid New Zealand drivers licence
• Earn over $30,000 per year before tax

Conditional approval
After completing our online loan application, if successful we’ll offer you a conditional approval. From here we collect further information from you, such as verifying your identity and looking at your recent bank statements. Don’t worry, this can be done quickly and easily using secure online processes. Once we have all the details we need and have agreed on a loan amount and repayment term, we’ll process and payout your car loan. This may take a day or two to complete.

It’s time to get behind the wheel
Now that you’ve found the perfect car and are heading off down the road, remember that we’re still here to support you. You’ll find lots of helpful and frequently asked questions on our website, as well as online access to your account so you can track your repayments or update your details whenever you need to.