The Commerce Commission acknowledges the serious impact COVID-19 is likely to have on lenders and borrowers, and wants to ensure all necessary information is available for both parties.
Commission Chair Anna Rawlings believes people should consider all avenues first.
"Many people will need to take on more debt at this time, and we know that may be inevitable. However, we want to provide as much information as we can to help people avoid becoming overwhelmed by debt."
Rawlings said lenders must comply with the Credit Contracts and Consumer Finance Act 2003 in order to provide additional support to financially stressed borrowers, whilst also considering borrowers' interests are being properly protected.
"We are providing guidance to lenders to assist them in complying with responsible lending obligations. The Commission acknowledges that the application of the CCCF Act's requirements will be informed by the circumstances in which lenders, acting reasonably, are operating while COVID-19 affects the New Zealand economy," said Rawlings.
Borrowers can look at alternative options like Government financial support to help with direction and managing credit.
There has been a question and answer document established for borrowers providing information on hardship and how to apply for changes to loans.
The document also provides details to help lenders meet the responsible lending requirements.
You can read the document here.