A financial consultant is expecting more people to ask their friends and relatives for loans this Christmas, as they find access to finance blocked by new consumer credit rules.
Tougher new credit rules came into force this month, with lenders under greater pressure to ensure borrowers would be able to afford loans.
Financial consultant Shula Newland said pressure would be also put on employers to pay advances, and on family members to get loans out in their name instead.
She said that was concerning as their employer, friend or family member may not be aware of the risk they were exposing themselves to, or the harm it may cause to the borrower in order to pay back the loan.
The number of declined loan applications would increase due to the changes, Newland said.
"We're heading into Christmas, and we all want that feel good buzz that comes from watching the children open all the presents and enjoying their new gifts.
"However, those that have struggled to put any savings aside, will get a surprise when their loan gets turned down now due to the new regulations, and that will sadly leave them in a hopeless situation this Christmas, and looking for other options."
People should think twice if a close relative or friend asked to borrow money or apply for credit on their behalf, Newland said.
"If they got declined due to affordability there is a real chance they may struggle to pay you back the money as well."
Newland has set up a social enterprise called Affordit NZ, to educate consumers about the legislation and their options if they do not meet the affordability criteria.
She still believed some unscrupulous lenders would take advantage of the situation and use a "false affordability" to grant a loan. She also warned against going to lots of different lenders until one approved a loan.
"I am hopeful that those who find they can't get credit will use the tools and resources at Affordit NZ to reduce spending, increase their knowledge and take back control of their finances."