Personal Loans and Debt Consolidation
New Zealand Personal Loans and Debt Consolidation
Thinking of getting a loan to pay those unexpected bills, take a holiday or finance your wedding? We take a look at personal loans in New Zealand, including what they can be used for, where you can go to get them, and the option of debt consolidation in New Zealand.
Personal loans in New Zealand are an accepted method of financing a variety of purchases in New Zealand. Like credit cards, they help facilitate the modern consumer's need for instant gratification, as well as providing a useful source of funds for unforeseen essential costs. Whether it's paying for a holiday, an extension to the garage, unexpected bills and expenses, or any personal needs other than buying a home, personal loan products are available for these purposes. Generally:
- Personal loans are a useful tool for borrowing for the medium term (that is, from 6 months to around 5 years).
- The amount able to be borrowed will generally range from about $500 to $50,000 and sometimes more.
- Repayments are flexible and can normally be made weekly, fortnightly or monthly.
- Many loans will allow extra repayments at no additional costs, and also offer extensions on the loan if required.
- Personal loans will usually be more affordable than finance or other hire purchase arrangements, as well as being more flexible.
- Some New Zealand loan providers offer fixed interest rates over the life of the loan, so the borrower will always know what their repayments are going to be.
- Personal loans can be approved in a short timeframe, often online or over the phone, giving the borrower instant access to cash.
- Both unsecured and secured personal loan options are available. Normally a lower interest rate is offered to borrowers who have property (such as a vehicle or home) to offer as security, or have a third party guarantor willing to sign off on the loan.
- Insurance on a personal loan is usually obtainable. This will cover your loan repayments if you are made redundant, declared bankrupt, are unable to work due to disability, or die. A premium is normally added to the balance of the loan if so required.
- Personal loans in New Zealand will incur a loan approval or administration fee when drawn down, and some loans may charge fees for other services such as topping up the loan. Check the fine print to make sure you know the terms and conditions of the loan.
Debt consolidation loans in New Zealand
A loan that is taken out with the purpose of paying off all your debts and transferring them into a single loan is known as a debt consolidation loan. The advantages of debt consolidation loans include:
- Possibly lower interest rates when compared to all the combined debts that were previously being serviced, saving the borrower money.
- Taking control of your loan: one repayment date gives the security of knowing when the loan will be paid off.
- Reduced cost by cutting out multiple bank, hire purchase, credit card, service and late payment fees.
- Reduced complexity by cutting out multiple bill payments.
However, it must be noted that fees charged for a New Zealand debt consolidation loan can be high, and added to the interest it may not be financially sensible. Ensure you read the terms and conditions before signing up for such a loan.
New Zealand cash loans
Companies offering fast cash loans and instantly approved loans are a good option for those with a bad credit history. They are also great if you require short term bridging finance for sudden expenses or bills. Beware, though, cash loan lenders often charge higher interest rates. The best idea is to use these lenders only when necessary and for short term loans.
Where can I get a loan in New Zealand?
Personal and debt consolidation loans are a useful tool in some circumstances for borrowers. These loans are generally available from:
- New Zealand banks - banks normally have better interest rates, especially if you have an existing relationship with them, and should be your first port of call when looking for a personal or debt consolidation loan in New Zealand.
- New Zealand loan and finance companies - these are usually best for those with a bad credit history or lacking appropriate security.
- New Zealand credit unions are a good option for borrowers who are members, as they offer low interest rates.
- If you are a homeowner, it will be cost effective for you to take out an extension on your mortgage, rather than drawing out a personal loan.
- Those without a mortgage may be better served by a low interest rate credit card, with several of these cards offering better rates than many personal and debt consolidation loan options.
Looking for more information? Find NZ loans in the NZS.com directory.
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