Loans in New Zealand in 2017!

How to choose the best loan for you?



  • Loan simulation

    Loan simulation on lenders websites show the differences between offers, in terms of monthly payments and also the total cost to pay. In any case we recommend you to make a credit simulation on 2 or 3 websites that suit you and only then make your online application. If you hesitate between several offers, make several credit applications to receive offers. This will allow you to compare the contracts.
  • APR.*

    Annual Percentage Rate represents an annual cost (in %) of borrowing. The APR include factors such as interest rate and certain other fees and charges into account. In order to make it easier for you to compare one loan to other similar loans, lenders are required to tell you their APR before you sign an agreement.
  • The application fee.**

    The records of expenses are very different from one institution to another. High records charges may hide behind a low APR. Up to 1% of the credit amount, expenses records are reasonable.
  • The total cost of credit.

    The total cost is the first item to check for comparing credit offers. This is the amount you will pay in the end. This amount includes interest, possible administrative costs or insurance.


Minimum loan amount
$3000
Maximum loan amount
$100000
Minimum loan term
6 months
Maximum loan term
7 years
APR
17.95 - 18.95 %
Minimum age
18 years
Loan granting
Good
Online application
anz.co.nz
Requirements:
  • - must be over 18 years old;
  • - must be a permanent New Zealand resident;
  • - must apply for $3,000 or more.
Representative example: Loan amount: $10000, Loan term: 5 years, Interest: $5240, Total amount payable: $15240, APR: 17.95%
NB! Total amount payable depends on the loan amount, percentage, terms and individual credit worthiness.
Minimum loan amount
$1000
Maximum loan amount
$50000
Minimum loan term
1 year
Maximum loan term
5 years
APR
13.95 - 20 %
Minimum age
18 years
Loan granting
Good
Online application
westpac.co.nz
Requirements:
  • - you must be at least 18 years of age;
  • - be a permanent New Zealand Resident;
  • - have a regular income.
Representative example: Loan Amount: $10000, Loan Term: 5 years, Interest: $39.20, Total amount payable: $19211.95, APR: 13.95 %
NB! Total amount payable depends on the loan amount, percentage, terms and individual credit worthiness.
Minimum loan amount
$2000
Maximum loan amount
$80000
Minimum loan term
6 months
Maximum loan term
5 years
APR
10.93 - 100.67 %
Minimum age
18 years
Loan granting
Good
Online application
futurefinance....
Requirements:
  • - you must be at least 18 years of age;
  • - be a permanent New Zealand Resident;
  • - have a regular income.
Representative example: Loan amount: $10000, Loan term: 1 year, Interest: $1291, Total amount payable: $11779, APR: 70.80%
NB! Total amount payable depends on the loan amount, percentage, terms and individual credit worthiness.


Useful information on financial products, debt and consumer rights!




Before you borrow:


Before you borrow money you should ask yourself whether your really need to spend the money and whether you can afford to pay back the money you're planning to borrow. Before borrowing ask yourself:
  • Can the purchase wait until I can afford it without taking a loan?
  • If the purchase is urgent is there another way I can get it? For example, ask employer for money advance, borrowing from family or friends.
  • If the purchase is not urgent can I save up money?

You should never take a loan if:


  • you want to take a loan to pay off other loans;
  • you already have one or more loans;
  • you already have other outstanding debts and/or missed payments;
  • if you are not sure of your capability to pay the loan back on time

If you still feel the need to take a loan you should pay attention to:


Look at your income and outgoings and think if you'll be able to pay all your bills and debts.Calculate how much you can afford to repay each month. If your budget shows that you'll have no money for extra payments then it means you can't afford to take a loan.

*APR


For example:

Lender A offers 3000 NZD for 1 year with an APR of 11.4%

Lender B offers 3000 NZD for 1 year with an APR of 19.9%

As it shows, in the scenario above, borrowing from Lender A would be a better idea, because you would get the same amount of money for the same term, but each month you would pay less interest.


**Borrowing costs and fees


  • Application fee: some lenders may ask you to pay this fees when setting up your loan;
  • Refund Fee: this fee can be charged if you overpay your lender and they have to refund overpaid amount of money back to you;
  • Monthly loan administration fee: some lenders may ask you to pay monthly loan administration fee;
  • Early loan repayment fee: You may be asked to pay this fee if you decide to pay-out your loan early. This fee is calculated according to how much you still owe to your lender and for how long.
  • Late payment charges: if you miss a payment you usually have to pay late payment charge, so make sure you never miss a payment to avoid extra charges, also please note that this can also affect your credit score, which can make it harder to borrow money in the future.
  • Legal fees: if you don't pay back your loan, your lender can go to court to recover the owed money, in such cases you will be asked to cover these expenses.

Some loans have variable interest rates, which means that interest rate can increase or decrease. You shouldn't take this type of loan in case you feel that you won't able to repay the loan if interest goes up.

Don't accept first loan you're offered, compare various lenders to make sure you get the best possible loan offer!

If you're not able to pay back loan on time:


  • Loan extension: If you realize that you will not be able to repay the loan on time, there is a service of loan repayment period extension, which is offered by many companies for an additional cost. Every credit company sets the fee for the service of extending repayment period itself.
  • Credit holidays: the delay of loan payments for a certain amount of time is called credit holidays. Credit holidays are available in some cases, such as a temporary loss of working ability or loss of job. In most cases credit holidays are granted for a period from one month to one year. This is common for longer-term loans.

Personal Loans

A personal loan can be the perfect way to get what you've always wanted. Personal loans can be used for practically any legal function such as paying for tuition fees, debt consolidation, a holiday, a boat, kitchen renovations and even a car.
Personal loans are one of many types of loans you can borrow from a bank. These loans are typically general purpose loans that you can use at your discretion.

How do personal loans work?

Personal loans are a relatively basic kind of financial product. Consumers can borrow a specific amount of money which is required to be paid back with interest (in equal repayments) over the term of the loan.


What information I need to provide?

  • Proof of income.
  • Personal details.
  • Details of your financial situation including your debts, expenses, assets and liabilities.


How do I prove my income?

If your salary have been deposited into a bank account in the last three months, the bank will be able to verify your income from your account information. If not, they’ll need to see one of the following:
  • a payslip, dated within the last four weeks, showing year-to-date income figures;
  • a payslip, dated within the last four weeks, showing your annual base income;
  • a letter from your employer on their letterhead, dated within the last four weeks, confirming your annual income and employment type (e.g. full or part time);
  • if you're self-employed, copies of your last two years' balance sheets/annual accounts and profit and loss statements and copies of your personal tax return;
  • if you have other income (e.g. rent, dividends) please contact your lender to discuss what their particular requirements will be.

Types of personal loans

  • Secured - tied to an asset (like a car or boat) which is used as collateral if you fail to make your repayments.
  • Unsecured - not tied to an asset and therefore offers no security to the bank if you are unable to make repayments.
  • Overdraft/ line of credit - this is a personal loan with a difference. Similar to a credit card, the borrower can spend up to an agreed limit, and just pays interest on the outstanding balance each month. Unlike normal personal loans, there is no requirement to pay in full by a certain date.

If a loan is secured this means that it will be tied to an asset, which can be repossessed if you fail to make your repayments. Unsecured loans are collateral free and therefore tend to have higher interest rates.

Unlike other forms of finance, such as a credit card, personal loans are generally cheaper as on average they have lower interest rates and have the requirement to pay it back in a set period.

Credit refusal.

All credit institutions have their own criteria to accept or refuse a credit. Each organization has developed calculation rules to determine in advance if you have a risk of ending up in litigation. They use scoring methods. This calculation takes into account many factors such as age, bank, educational level, number of children, occupation and budget. Your application can be accepted by one bank and denied by another. Your banker may refuse your request because it determines your debt ratio is too high. Every lender has its own budget criteria.
MoneyGuru24.com