In a higher interest rate environment, securing an appropriate personal loan or vehicle loan requires a strategic approach. So, here are some key factors to pay attention to and think about.
When interest rates are high, they can have a significant impact on both the short-term and the long-term affordability of your loan. So, it’s all the more important to consider how the repayment amounts will fit into your budget, but also how much you will be paying in interest costs over the life of the loan.
Start by analysing your income and expenses to determine the maximum monthly payment you can afford. Then, use loan calculators to estimate the total interest you'll pay over the loan term. By keeping affordability top-of-mind, you can make informed decisions that can help you manage debt more effectively.
A higher credit score can be like a golden ticket to more favourable loan terms.. Before applying for a loan, get a free copy of your credit report from one of the major credit reporting agencies in New Zealand – Centrix, illion, or Equifax. Then, check the credit report for inaccuracies and take steps to improve your credit score, like:
Knowledge is power, so make sure you research and understand the loan options that may be available to you.
It’s important to compare loans based on repayment terms, fees, penalties, and any available benefits or features as well as the interest rate. For example, some loans may offer flexible repayment options, grace periods, or the ability to make extra payments without penalties, which could save you some interest over the term of the loan.
Thoroughly exploring various loan options and carefully considering their unique features and conditions can help you make a well-informed decision that aligns with your financial goals.
At better™, we're dedicated to helping Kiwis find the right loan for their needs. From vehicle finance to debt consolidation, renovation, and wedding loans, we've got you covered. Visit better.co.nz to get started.
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.