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Common Misconceptions About Non-Bank Lending

Separating fact from fiction—why non-bank lending is safe, practical, and often a smart first step.

Key Takeaways 

  • ✅ Regulated under New Zealand’s CCCFA
  • ✅ Flexible, fast solutions when banks are too slow
  • ✅ Competitive and practical—not just “last resort” lending
  • ✅ A stepping stone to traditional bank finance
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Myth: Non-bank lenders are risky or unregulated.

Reality: Licensed non-bank lenders in New Zealand are regulated under the CCCFA and must follow the same responsible lending rules as banks. They are professional financial providers—not loan sharks.

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Myth: Non-bank loans always cost more.

Reality: Licensed non-bank lenders in New Zealand are regulated under the CCCFA and must follow the same responsible lending rules as banks. They are professional financial providers—not loan sharks.

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Myth: Non-bank lending is only for desperate borrowers.

Reality: Non-bank lending is fit-for-purpose. Borrowers often use it as a strategic stepping stone, transitioning smoothly to a bank once they meet criteria.

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From “No” to home ownership

Sarah, a self-employed graphic designer, was declined by her bank due to variable income. A non-bank lender approved her using alternative documentation, allowing her to purchase her first home. Two years later, she refinanced with a major bank at a lower rate—safe, practical, and effective.
Luminate Financial Group
Important Information
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Luminate Financial Group Limited (FSP765531) is a licensed Financial Advice Provider (Class 2 FAP), authorised to provide regulated advice on home loans, commercial and business lending, and specialist finance.

Luminate Finance Limited (FSP449126) is registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 to provide consumer credit contracts and non-consumer credit contracts. It is not a licensed Financial Advice Provider and does not offer regulated financial advice. Investment opportunities are available only to investors who meet specific wholesale investor criteria as defined in the Financial Markets Conduct Act 2013. These are not regulated offers and are not open to retail investors.

All lending is subject to credit assessment and responsible lending obligations under the Credit Contracts and Consumer Finance Act 2003. We follow the Responsible Lending Code to ensure loans are suitable and affordable for our clients.

¹Past performance is not a reliable indicator of future results. Fixed rates are subject to change. Terms, conditions, lending criteria, fees, and charges apply. Images may be indicative only.

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