Short-term loan finder™ – Compare your options here

Short-term loans are a financial ladder that can help you reach the things you desire.

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Short-term loans can fill a gap between now and payday, especially if you have an instant need for cash, but are they safe?

Loans like mortgages and credit for cars are usually with you for a long time, but what if you need a short-term option? Borrowers take out these loans with the intention of paying them back quickly. They’re becoming an increasingly popular option for Kiwis looking to borrow money and deal with the debt in a timely fashion.

Short-term loan comparison

Name Product Maximum Loan Amount Loan Term Turnaround Time Loan Interest Minimum Monthly Repayment Establishment Fee Account Administration Fee
$600
Up to 42 days
Overnight, or within 60 minutes with fast payment
250% p.a
N/A
$58 (less for loans under $400)
$6.10 per month (paid in advance)
Cash Relief offers short term loans of up to $600. Eligiblity: Be over 18, working full time and not rely on welfare payments.
$100,000
6 months - 3 years
Same day upon approval
From 9.95% p.a.
N/A
$240
$10 per month
Borrow from $2,500 and enjoy a flexible repayment schedule. Eligibility: Be over 21, no minimum work history required, working visa applicants accepted (conditions apply).

Compare up to 4 providers

Types of short-term loans in New Zealand

People use short term loans for a variety of purposes and as such, there are a few different types you can consider.

  • Payday loan

People use payday loans as a short-term solution, so they can repay it using their next paycheque. The lender usually bases the loan amount, (which can be as high as $2,000 or as low as $100), on your income and current financial situation, so it can be an option for people with less than perfect credit.

  • Unsecured short-term loan

An unsecured loan is one which does not require you to use a asset, such as a car or house as collateral. Therefore, the eligibility requirements are far stricter because the lender is taking on more significant risk and will receive nothing if you default on your loan. Unsecured loans usually offer a minimum term of one year.

  • Secured short-term loan

Secured short-term loans involve you securing an asset, for example, a car or your house, which means the bank can repossess it if you default on the loan. These loans pose minimum risk to the lender but are extremely risky for you as the borrower, as you may lose the asset you put up as security.

Make sure you weigh up the benefits and drawbacks?

  • Short-loan terms. Quickly repaying the debt is one of the most significant benefits of a short-term loan, meaning less interest and fees.
  • Various loan amounts. You can typically borrow between $100 and $2,000 but it may be as much as $10,000.
  • High cost. Short-term loans, from standalone lenders, come with higher rates and fees than banks and credit unions.
  • Dodgy lenders. While many reputable lenders operate in this space, you may come across dodgy ones that approve you for a loan you cannot afford.

Reasons you might need a short-term loan

People choose to get short-term loans for a variety of reasons, including;

  • To pay for unexpected or forgotten bills or payments
    Sometimes bills can pile up, and it’s not until the reminder letter comes from the utility company that you remember you haven’t paid. If the bill is exceptionally overdue, it could disrupt your service supply. If you speak to your provider, but it won’t approve an extension, a short-term loan may help solve the issue.
  • To cover expenses until payday
    If you receive your pay fortnightly or even monthly, you may find you are short on funds for one of two days or even a week. If you can’t make your funds last until payday, you could apply for a short-term loan. Bear in mind that these loans come with a higher than standard repayment costs.
  • To bridge an income gap, when you are waiting for a payment
    If your employer is sometimes unreliable with your pay, or a payment is taking longer to clear than expected, then you may wish to use a short-term loan to pay for a necessity before your money hits your account.
  • To pay for shopping or a holiday
    Sometimes you need to get away from the hustle and bustle, but don’t have the money to make it happen. If you want to take a holiday but don’t want the hassle of saving, a short-term loan could make your vacation arrive sooner.
  • To pay for an item when you don’t want to or cannot use a credit card
    It’s no secret that retailers love cash and you can often pick up items at a significant discount if you choose to pay with cash over plastic. You can also use cash at garage sales and op shops to snap up a bargain.

Case study: Sarah and her mechanic

Sarahs broken carSarah finds herself in a difficult situation. It’s one week before Christmas, and her car breaks down on the way to the shops in Napier. She doesn’t use her car often, mainly to get places on the weekend, so usually, it wouldn’t be an issue. The trouble is, Sarah needs her car to visit her family in Auckland on Christmas day, so she can’t wait to repair the car the following week when she receives her pay.

The car repairs will cost $450, her credit card is maxed out, and she needs to pay the mechanic tomorrow. Sarah considers her options and finds that a short-term loan will best meet her needs. She will receive her pay at the end of the month, so can repay the loan without difficulty.

Should you apply for a short-term loan?

When deciding whether to apply for a short-term loan, you need to consider your overall financial position. Are you borrowing money to pay off other debt? If you are, it is a risky practice and has the potential to lead you into a dangerous spiral of debt.

Think about whether you are using this loan to pay for long-term recurring expenses, such as everyday living because this is a dicey practice and one that will see you add to your debt. You need to consider your current debt and your ability to pay back a short-term loan.

Questions you might have had about short-term loans

There’s no shortage of misinformation about the range of short-term loans in New Zealand. If you have a question, please feel free to leave a comment below.

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