The government is targeting "predatory" loan sharks and truck shops by bringing in tougher measures to stop people spiralling into debt.
Irresponsible lenders will face new penalties including fines of up to $600,000.
Helping loan shark victims is a daily occurrence for The Salvation Army.
Sallies representative Campbell Roberts says, "They're buying highly needed products like fridges and then they're signing agreements in desperation to get those that actually tip them over completely financially."
The government says it will cap the total amount of interest and fees charged, impose tougher penalties for irresponsible lending, and introduce a 'fit and proper person' test for lenders, truck shops, and door-to-door salesmen.
Commerce and Consumer Affairs Minister Kris Faafoi says, "For instance if I take a loan of $500 and it's a high interest lender then the most I will pay back is $1,000 including interest and fees. At the moment that $500 could turn into $3,000, $4,000 or $5,000."
Prime Minister Jacinda Ardern says, "What we're doing here is saying we've put expectations in place that you will act in an ethical way, so putting rules and penalties around the way that people behave."
Roberts says law changes in 2015 did not go far enough and he fears the finance sector will try and bring about changes before the changes are introduced.
"There needs to be a lot of vigilance around that. In 2015 the government brought some measures in and they were severely weakened by the lobbying from the finance industries and that must not happen next time."
Faafoi says Māori and Pasifika were among those most affected.
The changes are expected to come into effect from 2020.