Need to borrow up to $5,000 today? Read our guide for all of your loan options, even if you have bad credit.
When you have a bad credit history, you’re usually not eligible for a loan from a bank or traditional credit lender. However, there are loan options available. You need to show you can repay the loan, by providing evidence of a regular income, whether that’s through employment or Work and Income payments. If you’re unemployed and need a loan, read our guide here.
High-cost short term credit is not a long-term financial solution and can be expensive if borrowed for a long period. You should always refer to your loan agreement for exact repayment amounts.
Check your options before you borrow:
- For information on managing debt and further advice, call the New Zealand Federation of Family Budgeting Services on 0508 283 438 (freephone).
- Talk to your utility providers to see if you can agree on a payment plan.
- If you receive benefits from the government, ask about an advance from Work and Income. Phone: 0800 559 009.
The Commerce Commission New Zealand website explains how loans work and what to be aware of when borrowing from a lender.
Compare $5,000 loans to apply for today
Tips on receiving approval for a bad credit loan
There is no surefire way to guarantee you will receive approval for a fast cash loan. When you’re considering applying and your credit history isn’t perfect, bear the following in mind:
- Check the eligibility criteria before applying
Lenders have set eligibility criteria which you can check on finder.com/nz review pages. Check to see if you meet these criteria, and if you’re unsure, call the lender to discuss your situation.
- Order a copy of your credit file
While you may think you have a good idea of your credit history, your credit file is the only accurate record of your financial account and what lender’s use to judge your creditworthiness. You can order a free copy of your credit file from the leading credit reporting agencies in New Zealand.
- Compare your bad credit loan options before you apply
Every application you make shows on your credit file, so make sure you compare your options before you ask to minimise the number you make.
Options for an unsecured $5000 loan with a good credit rating
If you have good credit, you may be eligible for a loan from a bank, credit union or standalone lender at a more competitive rate than bad credit loans. You may be able to borrow up to a limit of $5,000 and not have to attach an asset as a guarantee.
How much do $5,000 loans cost?
- NZCU South offers a range of loans from $1,000, with interest rates being from 9.95% to 18.95% and an application fee of $245. An example of a loan from NZCU South will cost you $26.66 per week, if you borrow $5,000 at an interest rate of 13.95% p.a. over three years.
What to consider when comparing $5000 loans
- The convenience of an online application
The convenience of online application forms and quick approval systems can save time. You also have the chance to compare a range of credit providers, which improves your choice.
- There are minimal or no credit checks
It can be difficult receiving approval for a personal loan, if you have a bad credit history. A bad credit loan gives you access to lenders who look at your current financial situation when considering you for a loan. If you have significant credit problems, you can look at no credit check loans.
- Simple repayment terms
You usually make the repayments when you receive your pay, and some lenders give you options on how to make repayments. Most lenders offer direct debit repayments, as you don’t have to worry about making the repayments yourself, but you do need the money available in your account.
- Bad credit loans are high-cost
Due to high risk of these loans, the lenders usually charge higher fees.
- Disreputable lenders operate in the bad credit loans space
Many dishonest lenders operate online, and prey on people with bad credit, so make sure you evaluate the lender before you apply.
Things to avoid with bad credit loans
There are risks associated with loans for people with bad credit. Avoid the pitfalls outlined below:
- Not being cautious. Make sure you only choose a reputable company.
- Not considering the affordability. Think twice before applying for a bad credit loan up to $5,000. The repayment period is shorter than standard loans, which means your repayments are quite high. Lenders usually provide calculators to show an indication of your repayments.
- Not considering the fees and the interest rate. Lenders charge you an interest rate, as well as fees and other charges. Check these before you apply and consider the total cost of the loan.
Quick ways to borrow money
|Type of Lender||Avg. Interest Rate||Avg. Repayment||Turnaround Time|
|Traditional Bank||14% p.a.||$1041.93*||1-3 business days|
|Online Lender||39.20% p.a.||$672.24^||1 hour – conditions apply|
|Payday Loan||319.38% p.a.||$1280~||Same day|
|Peer-to-Peer Loan||8.86% p.a.||$955.21*||Next business day|
*average repayment based on a $30,000 loan over 3 years | ^ based on a $3,000 loan over 220 days | ~ based on a $1000 loan over 32 days
Frequently asked questions about bad credit loans
How do I apply for a bad credit loan?
You can apply for any of the lenders on this page by clicking “Go to Site”. If you can’t see this link, you can apply directly on the lender’s website.
What happens after I send my application?
This process will differ between lenders, but you usually receive notification as to whether or not you have been approved, along with instructions for the next steps.
Are my details secure?
When you apply for an online loan of up to $5,000, you securely transmit your details over an encrypted connection. The majority of sites use 128-bit SSL encryption, to ensure your details are safe.
Can I get a $5,000 loan if I am unemployed?
When an institution lends you money, it wants to be confident you can repay the debt within the loan term. If you are unemployed, your income may be limited unless you receive Work and Income benefit. If the majority of your money comes from Work and Income, you may be still eligible for a personal loan.