New customers with qualifying credit can enjoy 45 days interest and fee free on their first short-term cash loan. Apply today to get approved for up to $1,000.
Max. loan amount: $1,000
Loan term: Up to 45 days
Turnaround time: Same day upon approval
Fees: $28 - $48 Establishment Fee
Easy online application
Flexible repayment schedule
Types of loans for 18-year-olds
When you become 18 you have various loan options you can consider, including the followng:
A loan from your current bank. One of the problems 18-year-olds encounter when trying to be approved for a loan is they have limited or no credit history. One way to try and overcome this is to apply to your current bank. You are more likely to have a history with your bank if you’ve accessed transaction accounts, travel cards and other products, so they may be more willing to give you a loan.
Unsecured loans for lower amounts. If your bank doesn’t have a loan you want to apply for, you can consider personal loans for lower amounts. The standard minimum amount for loans is usually around $5,000, but you can find some lenders offering $1,000. There are some lenders that even have loans on offer from $200. Compare your options and only apply for as much as you need.
Secured car loans. If you want to buy a car, secured loans are less risky for lenders because they can recoup their losses if you default. New and used car loans are available and you can get a lower rate than with an unsecured loan.
A guarantor. If you find you are ineligible for a bank loan, you could consider asking your parents, another relative or even an older, close friend to become a guarantor for you. This person takes on a lot of responsibility because they are agreeing to take on the loan payments if you can no longer make them. You can compare lenders that accept guarantors and joint application personal loans here.
How to compare your loan options
When choosing the right loan for you, consider the following factors:
The interest rate the loan attracts. Check whether the interest rate is fixed or variable and how competitive it is compared to similar products.
How much you’re able to borrow. Lenders offer varying minimum and maximum loan amounts, but what they offer ultimately depends on what you can afford to repay. This is determined by criteria set by the lender.
Other features on offer. Have a look at the different features on offer, which you can find out more about by reading the reviews on finder.com/nz It’s important to familiarise yourself with value-adding features of a loan. These can include the ability to make extra repayments, an offset facility or extended warranty on a car loan.
The fees you will be charged. There are different types of fees you may be charged, ranging from establishment fees to monthly and early repayment fees. Find out what charges are associated with your loan before signing on the dotted line.
5 tips to be approved for a loan at 18
Show that you have savings. If you can show the lender you are good at saving they may be more willing to approve you. A steady savings history works best with your current bank as they can view your account information when you apply.
Offer a deposit. Having a deposit when you apply for a car loan shows you are in a good financial position. The larger the deposit, the less you need to borrow, and the more likely you are to be approved.
Get a letter from your employer. If you are only employed casually or have not been employed for long, a letter from your employer stating the security of your employment may help your application.
Apply for a lower amount. Applying for too much when you have a limited credit history or don’t earn a high enough income can be a red flag to lenders and result in an automatic rejection. Instead, ask to borrow a lower amount.
Apply for a secured loan. Secured loans, such as car loans, are less risky for banks because they can recoup their losses.
3 mistakes to avoid when applying for your first loan
While personal loans are helpful in many scenarios, it is in your best interest to avoid certain traps and pitfalls.
Not reading the fine print. Read through all of the loan documents before you sign anything and keep an eye out for ongoing account-keeping fees, early repayment fees and late payment fees. Make sure to read the terms and conditions document from start to finish.
Taking on a loan you can’t afford. When borrowing money, it is always important to use a calculator to find out what your repayments will be. If you can comfortably afford a certain amount on a loan, don’t feel tempted to borrow more, just in case circumstances change and you are unable to meet repayments.
Borrowing from an unlicenced lender. There are credit brokers and providers in New Zealand who operate illegally and target individuals who might not be approved for other loans. Make sure any lender you borrow from is licenced with the Financial Market Authority.
Pros and cons to consider before applying for your first loan
Gaining access to funds. A loan could give you access to the funds you need to make a purchase or investment.
Build up your credit history. Acquiring a loan allows you to establish and build your credit history. This ultimately affects your eligibility for other types of loans and access to better interest rates as well.
Limited loan amounts. If you have no or limited credit history you may only be eligible for a small loan, which may not be enough for what you need.
Risk of getting into debt. Taking on any loan comes with risk, so make sure to budget your repayments and don’t apply for a higher loan amount than you can afford.
How to apply for your first loan
After browsing through the table and finding a suitable loan, click the relevant link to go to the lender’s website and start the application process. Typically, to get a personal loan you will need to meet a range of criteria set by the lenders:
You must be at least 18 years old.
You must have a good credit rating and be able to provide proof that you can pay off the loan.
You may be asked to provide copies of your payslips, bank account statements and other credit contracts.
You also need to provide proof of ID, such as your driver’s licence or passport.
Frequently asked questions
Lenders have different application processes. You will need to provide a form of documentation, such as a driver’s licence or 18+ card; personal and contact details; information about where you work and your income; and other financial details laid down by the lender.
Compare the rates offered by different lenders and find a loan you are eligible for with the lowest rates. Remember to check the comparison rate as this includes fees and is more representative of the true cost of the loan.
Every application you make, for any form of credit, will appear on your credit file and affect your credit score. Applying for too many loans at once not only negatively affects your credit score, but is a red flag to lenders, who may reject you for further loans. You may want to wait to make another loan application, especially if you have limited or no credit history.
Matt Corke is the head of publishing in Australia for Finder. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time he has survived the dot-com crash and countless Google algorithm updates.
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