| How quickly can I get the money from my personal loan? | Different lenders will have your loan amount transferred to you within varying amounts of time. Some banks are able to offer existing customers same-day personal loans and some payday lenders can have loan amounts transferred to new customers within an hour of approval. If you are in need of the cash as soon as possible, it is advisable to check to see how long it will take to receive your loan amount before you apply. |
| What is the average interest rate on a personal loan? | At the time of writing the average rate is 14% p.a. However, it is important to keep in mind interest rates can fluctuate from 6.9% p.a up to 30% p.a. (or more depending on your credit score). The rate will depend on whether the loan is a fixed or variable rate; secured or unsecured. |
| What can the lender do if you fail to repay a secured personal loan? | Secured loans, as the name suggests, means you offer something of value as security on the loan. If you don’t pay, you may find the bank will repossess your car (or any other item offered as security) and sell it. |
| What’s the best personal loan? | Unfortunately, there is no easy answer to this question. The best loan for you will depend on what you need and also what loans you are eligible for. You can use the comparison tables available on finder.com/nz to compare similar loans and select the most competitive loan option that offers the features you want. If you are eligible, then you can apply. |
| Can I pay back my personal loan early? | You may be able to pay back your personal loan early but it depends on the conditions of your loan. Most variable rate personal loans allow for additional repayments or paying back the loan ahead of time without penalty. Fixed rate personal loans usually come with exit fees and early repayment fees; or limitations on how much you can repay ahead of schedule. You will need to check if there are fees involved before paying extra on your loan. While you may save on interest repayments, you may not come out ahead if you have to pay early payout fees. You can calculate how much you may potentially save using this calculator. You can find out if you can repay your car loan early on this page. |
| I’m having trouble repaying my loan – what do I do? | If you are having trouble repaying your loan you need to get in contact with your lender as soon as possible. They may be able to organise a payment plan with you, or offer some sort of option to help you manage your repayments. You also have the option of getting in touch with the Citizen’s Advice Bureau on 0800 367 222 and they will put you in touch with a non-profit organisation that can help to organise your budget. |
| Can my personal loan be funded on the same day? | Same day personal loans are a relatively new feature, and requires you to meet the criteria set out by the bank. Some require you to be an existing customer or apply by a certain time of day. If you are approved, you will get access to your funds on the same day. Find out what lenders offer this feature. |
| Can I be approved for a loan if I work part-time or casually. | Yes. Many lenders will consider you for a personal loan if you work part-time or casually. Check if you meet the criteria. |
| Do I have to tell the lender what I’m using the money for? | The answer to this question depends on what type of loan you are applying for. If you are wanting a secured car loan then all details of the car, finance agreement and registration must be given to the bank or lender before you receive the money. However, if you are getting an unsecured personal loan, then you only need to give a general idea of the loan purpose to the bank. If you are consolidating debts, you will have to give details of your other loans and credits to the institution. |
| Can I buy a car with a personal loan? | You can consider an unsecured personal loan or a secured personal loan if you are buying a car. Personal loans can be used for purchasing a car, especially if you want to buy an older model or a car that does not fit with a lender’s criteria. An unsecured personal loan could be used for a car, but it is important to keep in mind that unsecured personal loans come with a higher interest rate than a loan secured to a vehicle. |
| Can I take out a personal loan to cover a valuation shortage or to pay Lenders’ Mortgage Insurance? | If you have been approved for a home loan that falls short of your chosen property’s valuation you may be considering if it is worth applying for a personal loan. Personal loans might also be on the table to cover Lenders’ Mortgage Insurance (LMI). While this is an option, you need to consider if you will be approved for your personal loan (consider the home loan you have been approved for); and whether you can afford the repayments in addition to what you are paying towards your mortgage. |
| What’s the difference between a credit union personal loan and a bank personal loan? | Credit unions are different to banks in that they operate on a not-for-profit business model. Typically you will find there are not as many fees or charges with a credit union loan, which means the interest rate may be lower. Credit Unions are governed by the same regulations as banks so it is just as safe to apply for a credit union personal loan. |
| Why has the interest rate on my personal loan changed? | If you have a variable rate personal loan, then you may notice your interest rate goes up or down. This could happen due to a range of factors but is mainly based on what the Reserve Bank of New Zealand dictates the official cash rate to be. If you have found you rate has gone up, it may be a good time to consider refinancing your personal loan. |
| Should I take out a personal loan or a credit card? | Credit cards can give you convenient access to a line of credit and you do have the choice between a personal loan or credit card for a variety of purchasing needs. To work out which option is best for you think about how you need to make the purchase (if it is in cash you will be charged a cash advance rate with a credit card); how you want to repay your loan (you can choose to just repay the minimum amount with a credit card); and what you are purchasing with the funds. |
| What is the difference between short term loans and personal loans? | Whilst a short term loan, also known as a payday loan, is a type of personal loan there are a range of differences that make this type of lending completely different. Personal loans are generally taken out over 3 months to seven years, whereas a payday loan is usually between 7 days and one year. Payday loans are also for smaller amounts – between $100 and $5,000 – and are available to those with bad credit. |
| How much should I borrow? | Personal loans can vary greatly in size from $1,000 and upwards of $80,000. If you are purchasing an asset such as a car, keep in mind you may need funds to cover insurance. Many banks and lenders consider up to $20,000 and $30,000 to be a medium sized loan. If you are only going to borrow between $10,000 and $20,000 then a small personal loan may suit your needs better. |
| What is loan protection insurance and do I need it? | Many lenders offer loan protection insurance as an add-on to your personal loan. This insurance can pay the minimum repayments on your personal loan if you lose your job; or cannot work because of illness or injury. You usually apply for the insurance when you are approved for the loan but you may be able to get the insurance further into the loan term. |
| Can I get a personal loan for my solar panels? | There is increasing demand for loans from people like you who want to protect mother earth. Kiwibank offer a “Sustainable Energy Loan Programme” that can be added to a mortgage you already hold with them. They also offer $2,000 over 4 years towards the system. |
| How much do you have to earn to get a personal loan? | Most lenders will have a minimum income you need to earn to be eligible, but others will only require that you are employed or have the means to repay the loan. Minimum incomes can range from $14,000 p.a. to $50,000 p.a. but there are low income personal loans available. |
| Does my credit score affect my ability to get a personal loan? | Lenders use a variety of information to determine your eligibility for a personal loan, including your credit rating. The information on your credit file includes negative information such as defaults and bankruptcy listings; and personal information such as your name and address. From 2012 onwards, New Zealand credit agencies have included positive information about your credit history, such as regular credit card and mortgage repayments. You can check your credit score for free with finder to get a better idea of where you stand. |
| Will my credit score affect my personal loan interest rate? | Some lenders offer different interest rates to different borrowers depending on how risky they are to lend to. This is what is called “risk-based pricing”. Lenders that use risk-based pricing may use your credit score as an indicator of how risky you are to lend to. You can check the information in the finder.com/nz personal loan comparison tables to see what lenders consider when calculating your interest rate, what the interest rate range is (ie the minimum and maximum rate you can receive) or if the interest rate displayed is the rate you will get if you are approved for the personal loan. |
| How do I repay a personal loan? | Once you have successfully applied and received your funds, it is important to keep your loan repayments up to date. If you have applied for a loan with the bank your everyday account is with, then you will probably have an automatic direct debit set up. If your loan is with a separate institution, it is a good idea to set up an automatic transfer, via internet banking, a few days before your due date to allow for processing time. You will be able to check your balance, interest rate, repayment dates and schedules. You should login to your loan account regularly to check notifications and payments details. If you want to make additional payments then you could do this by internet transfers or if your bank allows it, over the counter deposits. If you miss a payment due to insufficient funds then it is important to call the bank and attempt to rectify the situation as soon as possible. |
| Can I use a personal loan for equipment finance and small business needs? | Yes, personal loans can help with your business needs too. You can access personal financing to help cover business needs — everything from trucks to equipment can be purchased or even leased with a personal loan. The same is true even if you have bad credit. Business vehicles including company cars, trucks or vans can all be financed with a personal loan. If your business requires specific equipment to purchase or lease, such as forklifts, earthmoving equipment, workshop machinery or even office equipment, you can take out a personal loan to help cover the costs. You won’t have to hurt your business’ cash flow to make the purchase. |
| How can I calculate repayments on my bank personal loan? | If you want to get a personal loan from Fox Symes, Gateway CU or GE Money you can learn how their calculators work. Or, maybe you want to compare loans from Citibank, Commbank or Bendigo Bank you can get more information here. You can also compare loans and learn how you use the calculators from ANZ, Aussie or Bankwest. If you are comparing loans from NAB, NRMA and RACV then learn how to navigate their calculators. You may also want to compare personal loans from Australian credit unions – Bankstown, Berrima and Big Sky let you calculate your borrowing amounts. If you are looking at loans from smaller lenders such as 360 Finance, ADCU and Arab Bank, find out how to use their calculators too. |
| How can I cancel my contract through cooling-off rights? | It’s important to know whether or not you are able to cancel your contract through the cooling-off period. Once you know that you are able to do this, fax a letter to the vehicle trader explaining that you would like to break the contract in accordance with the cooling-off period. Keep a copy of it and ask for proof that the company received it within three days of you signing the contract. |
| Am I able to do this for every car contract? | Some car traders do not allow you to have cooling-off rights. This is important to know before you try and break the contract due to the cooling off period. |
