430,000 Kiwi’s Are Behind On Credit Repayments

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More than 1 in 10 New Zealanders are in arrears - 11.9% to be exact.

That’s a lot of people who have fallen behind on their personal loan, car, credit card or mortgage repayments. Almost 5% (4.8%) are more than 30 days past due (up from 4.4% in January 2022). Source: Centrix Credit Bureau (Centrix) Of New Zealand.

According to Centrix, “the current climate appears to be putting pressure on households across New Zealand…. There are approximately 430,000 Kiwis behind on their repayments, a 20,000 increase from December 2022.”

But what about credit card arrears? By comparison, credit card arrears are at 5%, so far less than the 11.9% of debt arrears across all categories. But it’s still the highest level recorded since January 2021. Is it likely to get higher? Centrix reports that “the demand for credit cards has climbed 21.7% year-on-year”. So if more people are applying for them, then it’s quite possible arrears will rise.

The increased demand for credit cards may suggest that people are borrowing more to cover short term expenses, which is understandable given the cost of living crisis we are in the midst of. From the convenience of using a credit card to cover expenses, to having almost immediate access to cash, it’s easy to see why many people rely on them. It is important to remember, however, that becoming too reliant on them can come with consequences.

Loansmart’s Managing Director Murray Greig says “what people need to be mindful of is that falling behind on repayments has a negative impact on your credit rating. Your credit rating helps determine what interest rate you are offered on future loans, and if you’re approved for future loans, so it’s really important to maintain or better still increase it”.

If you have a lot of credit card debt, or are struggling to meet those monthly repayments, you may want to consider a Loan Assessment. Falling behind on your payments can have far-reaching consequences, from costing you more in missed payment fees to damaging your credit score down the line. And while it may seem like a minor setback at first, late or missed payments can add up quickly when not managed effectively – making any future borrowing much harder than it needs to be.

What is a Loan Assessment?

This is where we look at all your personal loans, including BNPL, personal loans, car payments, and credit cards. We look at how much you’re spending a month servicing all this debt, and what your loan costs are. Then we look at how we can make this more affordable by consolidating some or all of your debt into one loan with lower repayments.

Our goal is to provide you with a ‘smarter loan’ and we move fast to provide it, hence our tagline ‘Smarter Loans > Faster.

So if you’re starting to feel the pressure, you’re not alone. Many other kiwi’s are in the same situation – 430,000 to be precise! But looking for a short-term fix for what could be a long road ahead may not be a good idea.

It’s time to get smart NZ – get loan smart! Take a look at some of the other borrowers we’ve helped.