They are offered by three banks
NZ banks Westpac, TSB, and Kiwibank are now offering interest-free loans to customers who were impacted by recent wild weather events.
All banks have announced emergency financial support for customers, including allowing flood victims with home loans to temporarily put their repayments on hold.
But to further help flood and cyclone victims, TSB is now offering 90-day $500 emergency interest-free loans, Westpac up to $5,000 interest-free for up to 90 days, and Kiwibank short-term interest-free emergency loans on a case-by-case basis, Stuff reported.
The government recently passed regulations that enable banks to make emergency loans to flood and cyclone victims without the need for time-consuming affordability checks.
Duncan Webb, Commerce and Consumer Affairs minister, asked banks to charge low interest on the emergency loans.
“I have asked the banking sector for assurances that interest rates will be at usual or possibly lower rates,” Webb said. “So far, the response has been positive with one bank indicating their overdrafts will be interest-free.”
ANZ, ASB, and BNZ are all offering emergency overdrafts for flood and cyclone victims, but none so far said they will be free of interest.
Normal overdraft rates vary across banks, but ANZ charges 18.9% interest on its overdrafts, provided people remain within their overdraft limit, while Westpac usually charges 19.95%.
The new regulations enable banks to extend emergency overdrafts of up to $10,000 without having to first do affordability assessments to existing customers who are “experiencing, or reasonably expect to experience” negative effects from the flooding or other weather-related damage in the upper North Island in January and February.
Catherine McGrath, Westpac NZ CEO, said the government’s move provided banks with another tool to support customers.
“When disaster hits, affected customers sometimes need that extra helping hand to get them through, and with so much going on in their lives they don’t have capacity to go through a full lending application,” McGrath said. “We are offering the temporary overdraft at 0% interest for the first 45 days, with the possibility of extending this period a further 45 days, and there are no establishment fees in setting it up.”
Westpac customers without home loans can apply for a temporary overdraft of up to $2,000, while those with a mortgage can apply for up to $5,000.
The emergency loan regulations will take effect until the end of March and apply to customers in Northland, Auckland, Waikato, and the Bay of Plenty. Westpac said that for customers in other regions hit by the cyclone, such as the eastern coast of the North Island, they are expected to be eligible for the same support from early next week, Stuff reported.
How are you or your organisation helping flood and cyclone victims? Tell us about it in the comments section below.
