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Hardship assistance for a non-consumer loan

In March 2022, Anika and her partner, Jack, applied for a loan. The purpose of the loan was to refinance an existing loan for their investment property, and borrow a further $50,000 to complete some renovations at the property.

The loan was for an initial term of 6 months. After the loan term ended, Anika and Jack had the option to either repay the loan in full or extend the loan term for another 6 months, with a 1.5% increase in the interest rate.

Anika and Jack said they would no longer be able to afford their repayments if the interest rate increased by 1.5%, so they applied for hardship assistance. The lender declined Anika and Jack’s hardship application, as they said that decreasing the interest rate was not an appropriate form of hardship relief. However, the lender agreed to extend the loan term with the original interest rate, on the understanding that the interest rate would increase by 1.5% after a further 6 months.

Anika and Jack applied for hardship assistance again after 6 months. They said that the renovations completed at the property were faulty, so they had to pay for further renovations and repairs. Anika and Jack explained that due to this unexpected cost, they were unable to make their loan repayments, and their account fell into arrears. Anika and Jack asked to move to a different loan product that had a lower interest rate. The lender declined their request, as a change of loan product was not the type of hardship relief they provided.


Anika and Jack complained that the lender declined to offer hardship relief. They said that, under the law, the lender was required to consider their hardship application.

The lender explained that the assistance Anika and Jack requested was not within their hardship guidelines. The lender said that Anika and Jack would need to speak to their financial adviser if they wanted to change their loan product.


We found that the lender was entitled to decline Anika and Jack’s request for hardship assistance.

In this case, it was good to see that the lender did provide some hardship relief when Anika and Jack first requested it. However, the lender was not required to provide this relief.

As the loan was for Anika and Jack’s investment property, it was a non-consumer loan. It followed that the unforeseen hardship provisions of the Credit Contracts and Consumer Finance Act 2003 (the CCCFA) did not apply. Those provisions apply only to consumer loans. We explained that it was up to the lender to decide whether they would offer hardship relief on a non-consumer loan. If they did choose to offer hardship relief, the relief needed to be suitable in the circumstances.

We agreed with the lender that changing loan products was not a suitable form of hardship relief, and we could not require the lender to change Anika and Jack’s loan product to one with a more favourable interest rate. We explained that hardship assistance is intended to provide temporary, short-term relief, rather than a permanent change.


We recommended that Anika and Jack discontinue their complaint. They accepted our view.

Insights for consumers

A loan for an investment property is considered a non-consumer loan, so it does not offer the same protections as a consumer credit contract. Lenders do not need to provide hardship relief on a non-consumer loan unless it is specified in the contract.