Kaye* (aged in her 50s) had some health challenges and has been unable to work. When that happened, she had a $2k credit card debt with Kiwibank as well as $1k with TSB, which she was struggling to pay off due to her change in circumstances. “We tend to create debt when we have a regular income, but if something happens and we can no longer work, it really catches up with you,” says Kaye.
“On the benefit, you get enough money to cover essentials like rent and not much beyond that. I was finding it difficult because Kiwibank’s policy is a higher minimum repayment,” she explains. “I just wasn’t getting anywhere – the debt was always ticking over. I was feeling really stressed about it.”
She rang Kiwibank and they explained they have a higher minimum than other banks to help people pay it off faster. They suggested Kaye talk to their hardship team and tell them she couldn’t pay it off. “But I said I am going to pay it off, I didn’t want it to be written off as bad debt.” She asked if there was another way, and fortunately, one of the Kiwibank customer services team mentioned Ngā Tāngata Microfinance’s interest-free, fee-free loans.
They told Kaye that she’d need to apply through a Financial Mentor. “I contacted my local budgeting service and worked with my Financial Mentor who supported my application to Ngā Tāngata Microfinance,” explains Kate. “She helped me to fill out the forms, and work out what the repayments would be. It was going to be $30 a week to pay off both credit cards or $19.24 a week to pay off the higher credit card. Having the choice of two options and being able to discuss these with my Financial Mentor was really helpful. I made the decision to pay off the $2k loan as I didn’t want to put myself under pressure to pay off both cards at the same time.”
“The Ngā Tāngata Microfinance (NTM) loan has been very empowering,” says Kaye. “If you actually take charge of your financial situation, you can deal with it. It’s been nothing but positive and really helped me sort my situation. Before it felt like the debt was sliding away – so there came a point where I said ‘right, I’m stopping debt’. If I couldn’t afford it, I went without.”
“An interest-free loan from NTM is a very practical way of dealing with debt,” she enthuses. “I did a financial literacy course, which was great, but there was nothing really practical in it like this. Once my loan is paid off, then I know I can afford this amount every week, so I can pay off other things or save the money.”
“I’m grateful to have the opportunity to pay off these loans, and I’m now applying for a job! It’s been really helpful and I can’t speak highly enough of it.”
Note: all names including those of the loan companies have been changed. Any re-publishing of these case studies need the permission of Ngā Tāngata Microfinance Ltd.