How to Choose the Right Lender for Your Personal Loan in New Zealand?

So you want a personal loan – but do you know where to start?

There are lots of lenders offering personal loans, but it’s important to try and work with one that’s appropriate for your situation and individual circumstances.

At better finance™, we’re all about connecting people with a lender who will be a suitable fit.

But here’s the 101 on how it all works.

Understanding Your Personal Loan Needs

Before you begin, it’s a good idea to have a clear idea of what you need to borrow money for. Are you looking for debt consolidation, borrowing for home improvements, paying for an emergency expense or something else?

Think about how much you need to borrow and what you can afford to repay every fortnight or month.

It also helps to check on your credit score, so there aren’t any surprises, and generally, have a holistic view of your financial situation.

Types of Lenders in New Zealand

There are a number of different types of lending institutions in New Zealand.

• Banks

• Credit unions and building societies

• Online lenders and peer-to-peer platforms

• Non-bank lenders (such as finance companies)

At better finance™, we can help you look at which option is suitable for you. We don’t work with everyone in the market, but we can show you what our lending partners have to offer and make the process straightforward and simple.

Key Factors to Consider When Choosing a Lender

Lenders aren’t all the same.

When we’re looking at options, there are a few things to take into account:

Interest rates

These can vary between lenders and between the different types of lenders. We can help you get a clear view of what you will be charged for any loan you’re considering through better finance™.

Fixed versus variable rates

better finance™ connects borrowers with lenders that offer fixed rates for the term of a car loan or other finance products. This means you will have certainty about what you have to pay.

Upfront and ongoing fees

We’ll help you understand all the fees involved with any loan you’re considering. These may be charged when the loan is taken out, at a frequency over the term of the loan and if you want to repay your loan early.

Loan terms and flexibility

If flexibility is important to you, we can help you find a lender who can accommodate that.

That might mean considering loans that offer more early repayment options, or where there is more flexibility around extra payments.

Eligibility criteria

Lenders often have different lending criteria or appetites for certain types of loan applications.

When you work with the expert loan team at better finance™, we can help you find a lender who is a good fit for you as an individual.

This can be particularly important if your situation is a bit different to a “standard” application – maybe if you’re self-employed or have uneven income.

The lenders better finance™ works with can generally assess an application and provide an answer within a day or two of receiving all required information.

Service, support and trustworthiness

The better finance™ team is available when you need us. You can email us, phone us, or contact us via our online form.

We only deal with lenders who are registered on the Financial Services Providers Register in New Zealand and are subject to regulation in this country.

All lenders are required to treat you fairly and not let you take out loans that you cannot afford.

Red Flags to Watch Out For

If you’ve been looking into your options for finance, there are a few red flags to keep in mind.

• A lack of transparency: If it’s hard to get information about a lender, it’s a sign to stay away. All lenders should have a registered address in New Zealand, and it should be easy to get in touch with them.

• No registration in New Zealand: Your lender is required to be listed on the Financial Services Providers Register.

• Aggressive sales tactics: No lender should put you under pressure, and you should always be given time to think about your decision.

For more information, learn how to identify personal loan scams in New Zealand.

Four Top Tips to Consider Before You Apply

• Improve your credit score before applying: If your credit score is low, building it up may give you a better chance of being approved for a loan. You can do this by paying your bills on time and addressing any defaults listed on your credit history.

• Consider secured vs unsecured loans: If you have assets such as a vehicle or property you can offer as security on a loan, it may mean you can get a lower interest rate. This can work well when you are borrowing to buy a car, for example.

• Negotiate terms where possible: We can help you negotiate suitable terms with a lender.

• Read the fine print: It’s important to understand what your obligations and costs are, and what you can expect from the loan. If you have any questions, we’re here to help.

Ready to Find a Lender?

Take the hassle out of shopping around for a personal loan by working with the team at better finance™. We can help you find a loan and lender that is a fit for you and your needs. Get in touch with the team today.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.