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Credit Contracts and Consumer Finance Act 2003

Consumer credit contracts - Interest charges

37: Creditor to ensure that contract specifies annual interest rate or rates

You could also call this:

"Lenders must clearly state the annual interest rate in your loan contract."

Illustration for Credit Contracts and Consumer Finance Act 2003

You enter a consumer credit contract and interest charges may apply. You need to know the interest rate in the contract is for a year. The creditor must make sure the contract says what the annual interest rate is. You can find the annual interest rate in the contract. It may be a fixed rate or it may be calculated in a certain way. The contract must explain how the annual interest rate is worked out. The creditor is responsible for making sure the contract has this information. This is so you know how much interest you will pay each year. The contract must be clear about the annual interest rate.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM212783.

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Topics:
Money and consumer rights > Consumer protection
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Part 2Consumer credit contracts
Interest charges

37Creditor to ensure that contract specifies annual interest rate or rates

  1. This section applies if interest charges are or may be payable under a consumer credit contract.

  2. Every creditor under a consumer credit contract must ensure that the contract specifies the interest rate or interest rates under the contract in terms of an annual interest rate or annual interest rates under the contract.

  3. An annual interest rate may be specified by describing how the annual interest rate is determined in accordance with the contract.