These personal loans have a fixed rate of interest that can be secured or unsecured. Whatever rate is on your contract at the beginning of the loan term is applied to your account for the remainder of the term, so your repayments will always remain the same. The loan comes with a fixed repayment term of one year.
What can you finance with a one-year fixed rate loan?
You can use one of these loans for a range of purposes. Examples include:
Buying a new or used car. You can use a secured or unsecured personal loan to buy your vehicle and pay it back with fixed repayments. Just make sure you check your budget and you are confident one year will be enough time to pay it back.
Making a large purchase. This includes purchasing furniture, investing in home renovations or something similar. An unsecured personal loan may be an option to consider if you are looking to make a number of small purchases.
Consolidating debt. If you are paying off one or multiple debts on a loan or card accounts and you can repay within a year, you can lock in a competitive rate to pay it off.
How you can compare fixed rate personal loans
If you are considering applying for a one-year fixed rate loan, it is important to compare your options to ensure you find the right one. Asking the following questions can help when comparing your options:
What’s the interest rate? Make sure you check the interest rate and the comparison rate. The interest rate is what you are charged for borrowing, while the comparison rate gives you a better idea of the true cost of the loan including all fees and charges expressed as a percentage.
What are the upfront and ongoing fees? Check for establishment fees, monthly fees and annual fees. These can contribute significantly to the cost of the loan, especially as the loan is repaid over a short space of time.
What other charges apply? Are there fees for early repayment? What will you be charged for missed or late payments? Are you charged for making additional repayments?
Are you eligible for the loan? Check the minimum age, income, employment and credit history requirements and ensure you meet them. The next step is to use a personal loan repayment calculator and see if the repayments will be manageable on your budget. Ultimately, lenders will only approve you for a loan if they think you can afford it, so establishing this on your own can save you a rejected application.
Have you weighed up the pros and cons of these loans?
Your repayments will remain the same for the duration of your loan term
The loan term is short and you can have your debt repaid within one year
The shorter repayment term means your repayments will be higher
If you want to make additional repayments or repay your loan early, it is likely you will need to pay a fee
Questions you might still have about one-year fixed rate loans
Eligibility criteria differs between lenders. Generally, you need to be over the age of 18, have a good credit history and be a New Zealand citizen or permanent New Zealand resident. If you are a temporary resident, you still may have personal loan options available to you .
The loan amount you are approved for depends on your individual financial situation. Lenders generally offer anywhere between $3,000 and $80,000. You can click on the name of the lender from the comparison table above to find out the minimum and maximum loan amounts on offer.
You can apply for fixed rate loan terms in one-year increments, from anywhere between one and seven years.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over five years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at The Lizzies. Elizabeth has found writing about innovations in financial services to be her passion (which has surprised no one more than herself).
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