While it can be a good idea to squirrel away money for these kind of purchases, often it just makes sense to buy now and pay off as soon as possible, so you can at least enjoy that boat, wedding, or new deck in the meantime.

Depending on the amount of money you need, the length of time you’ll take to pay it off, and your personal circumstances, a personal loan can be a great way to get where you’re going.

Here at CreditVote.com, we’ve dished up a comprehensive comparison of New Zealand personal loans so you’re armed with the information you need to make the right decision for you. Check out the list of loans below, then read on for a summary of everything you need to know about personal loan interest rates, lenders, and fees.

NZ Personal Loans

There are so many things that compete for our time and money these days, and sometimes we just don’t have enough of the latter to do everything all at once. When those clusters of competing needs arise, a bit of credit from a responsible lender can be a huge help.

Here we take a look at just what personal loans are all about, whether or not they’re right for you, and what you need to know before committing to a specific personal loan lender.

What Are Personal Loans?

There are three types of personal loan available in New Zealand.

The first is what most people think of when picturing a personal loan: a sum of money borrowed to cover a relatively small cost – such as the price of a new bike, the cost of a wedding or funeral, or the price of some service, like new plumbing or electrical fittings.

The second type of personal loan are those used for debt consolidation. A debt consolidation loan can bring all your different smaller debts – such as credit cards, payday loans, etc, into one, larger loan, which may lower the total amount of interest you pay, and help you pay off the debt faster. Personal loans generally charge lower interest rates than credit cards, and because you sign on for a fixed term, you can feel confident you’ll pay off the loan over a set time.

The third type of personal loan is an overdraft on your personal bank account. An approved overdraft will let you ‘go into minus’ after you have used all the money in your account. The limit on an overdraft is generally quite small – around $500 – but talk to your bank to see what limit they’ll allow you. Overdrafts, if used, usually come with a monthly fee, and interest will also be charged on the amount you borrow.

Like any form of borrowing, a personal loan should be carefully considered first. Seeking financial advice and drawing up a careful budget can save you thousands in the long term.

Secured or Unsecured Personal Loan?

Personal loans are granted as either secured or unsecured loans. A secured loan means you will need to use an asset, like a boat, car, caravan, or even house, as security for the lender. If you’re unable to pay off your personal loan, the lender will then have the right to sell your asset to recoup the money you owe them.

Unsecured loans generally come with a higher interest rate, because the lender takes on more of a risk by lending you money without an asset to secure against. The lender can still take you to court to try and reclaim their money if you fail to repay it, but the risk is higher for them, so their interest rate is inflated to match.

The Pros and Cons of Personal Loans

Personal loans can take the stress out of saving for necessary items and upcoming events. Often it is much easier to pay down a loan than it is to save the same amount of money over time. Savings can always be broken into and diverted into other projects, but an automatic loan repayment, taken out of your account right after pay day, is not easy to touch. If you prioritise things right, you’ll pay off that new purchase quickly and comfortably, and be able to start saving for other needs.

While interest rates on a personal loan are higher than home loan rates, they remain more attractive than credit card and payday loan interest rates, and cover you for purchases that cannot be made under a regular home loan.

There are a few downsides to a personal loan too.

If you consolidate your credit card debts into a personal loan, then you may be tempted to start using your credit cards again, having ‘freed up’ the money.

Relatively high interest rates can also make personal loans an expensive option. If you borrow $20,000 at 13.90% over ten years, you’ll pay an additional $17,120 over the lifetime of the loan. If the interest rate is 18% over ten years? You’ll end up paying more than double the original loan amount in interest – a whopping $23,244!

It’s also worth bearing in mind the impact of a large personal loan on future financial obligations and opportunities. For example, will a bank still help you into a mortgage if you have a large personal loan and significant weekly repayments?

How to Get NZ Personal Loans?

A number of lenders in New Zealand offer personal loans.

The most trusted personal loan lenders are banks. If you’re keen to borrow from a bank, you can apply online – just find an interest rate and conditions that suit you from the table above, and click through to apply. You don’t need to apply to the same bank you have accounts with – feel free to shop around.

Peer-to-peer platforms are another way of accessing a personal loan. Peer-to-peer lenders are actually groups of Kiwis just like you and me, who invest their money in a lender that then dishes out money in the form of personal loans. For borrowers it can mean low interest rates and fees, and for investors it can mean a higher rate of return than other forms of investment.

If you don’t have any luck with your bank or a peer-to-peer lender, Finance companies or credit unions may be another option for you. 

What to Look for When Comparing NZ Personal Loans

Just like any form of credit, comparing NZ Personal Loans is vital to getting a good deal that will save you money. Check out these key factors to consider and keep them in mind when reading over the comparison table at the top of this page.

Which Personal Loan has the Lowest Interest Rate?

In the world of personal loans, interest rates are King. A good interest rate can mean the difference between paying a couple of thousand extra on your loan amount and paying more than double your loan in interest.

A low interest rate (13.90% or lower) will go a long way toward the perfect personal loan match, but there are other things to consider, such as:

Which Personal Loan has the Least or Lowest Fees?

Sometimes interest can be relatively low, but fees can add a lot to the total cost. A high establishment fee, large monthly fees, and a sizeable early repayment fee can make a huge difference. Make sure you bear fees in mind when comparing and choosing a lender!

What is the Term of the Loan?

Don’t underestimate the power of your loan term! In terms of interest paid over time and the speed at which you’ll get out of debt, a loan term can make a huge difference. When choosing a lender, you’ll need to do some serious thinking about how long you want to be paying off your loan, how much you can afford in weekly, fortnightly, or monthly repayments, and how much extra interest you’ll be paying if you extend out your term.

Turnaround time

Another important comparison to bear in mind when shopping for a personal loan is the turnaround time between application and loan drawdown. If getting money immediately is necessary, then you’ll want a lender with a quick application process and an immediate payout. Many banks will be able to get the money to you within a week, but this depends on how long your application takes to consider. If you’re in a hurry to get the money, ask before signing a contract.

What will my total repayments be with this lender?

Don’t look at a lender’s interest rates or fees in isolation. Interest rates may seem low, but extortionate fees can make that particular lender a worse option than one with a much higher rate. Ask your chosen lender to tell you what your total repayments would be, including interest and fees. If it seems too high, walk away. 

What Alternatives Are There to Personal Loans in New Zealand?

Getting a personal loan from a bank is a big commitment, but also a relatively safe way to borrow money in New Zealand.

If you’re looking for alternatives to a personal loan, here are a few options that may suit you better:

If you have an existing credit card or think you could get a credit card from your bank, this may be a better option if you will need to make ongoing purchases. You may even be able to transfer what you borrow to a 0% interest credit card, which could save you thousands.

If you’re looking to make a purchase with your loan money, a finance card like Q Card or GEM Visa might work well for you – often these lenders offer long-term finance with low or zero % interest rates and minimal fees.

If you’re just a little bit behind, consider asking friends or family for a loan, or your employer for an advance on your pay. They may or may not be open to this, but getting your pay sooner cuts out the need to dip into debt.

If you don’t have any joy getting a loan from your bank, a credit union may be able to help, and is a safer bet than turning to a payday lender. 

Ready to Apply for Your Personal Loan?

Life is short; saving is tough. Sometimes a personal loan is a great way to get your best foot forward and secure the things you need and want.

Often cheaper interest rates than a credit card, more reputable than a payday loan, and easier than years of savings – a personal loan is a popular option for those looking for credit.

Take the time to read through the comparisons above and find the right loan for you. Remember, it’s better to save money than to show blind loyalty to your current bank.

Pick the best deal, and you’ll have fresh cash fast to move onwards and upwards.


How Many Personal Loans Can You Have at Once in New Zealand?

Technically-speaking it is possible to have more than one personal loan – either with the same lender, or with multiple lenders – but each personal loan application is considered on a case-by-case basis. Lenders will factor in your income, total outgoings and debts, and credit history – among other things – and this total picture will determine whether or not you are able to secure more than one personal loan.

What NZ Banks Offer Personal Loans?

All the major New Zealand banks offer personal loans. Shop around using the comparisons above and find the personal loan that best suits you. 

Which NZ Bank Has the Lowest Interest Rate on Personal Loans?

Interest rates vary, so keep an eye on our up-to-date comparisons for the latest information on low-rate personal loans. Generally speaking, personal loans from NZ banks hover between 11 and 20%. 

Do Personal Loan Lenders Do Credit Checks?

Almost all personal loan lenders will want to do a credit check. One of the few loans you can get without a credit check is a payday loan, but this kind of loan comes with many risks.

Can Beneficiaries Get Personal Loans in New Zealand?

It is unlikely you will be able to get a personal loan from a bank as a beneficiary.

Can I Get a Personal Loan if I Work Part Time?

This depends on the lender and your income. Your lender will likely have a minimum income threshold that may not be met by part time work.

Do I Need to Give a Reason for Wanting a Personal Loan?

It is highly likely that your bank will want to know the reason for your personal loan application, as they use the purchase to understand your financial habits, whether or not the purchase will become an asset or a liability, and whether they see any risk that you will fail to repay the loan.

Am I Eligible to get a Personal Loan?

Different lenders have different eligibility criteria. Generally speaking, you’ll have to meet these requirements to be eligible for a personal loan:

  • Be at least 18 years of age
  • Be resident in New Zealand
  • Be in permanent employment
  • Have proof of your address (usually a bank statement or utility bill)
  • Have a mobile phone number and/or email address
  • Have a satisfactory credit history                     

What if I Can’t Repay My Personal Loan?

If you’re experiencing financial hardship and don’t feel that you can make your repayments, first try speaking with your bank or personal loan lender to see if there is any way you can work out a payment plan that relieves the financial squeeze. You can also try to reduce other expenditures so that making your repayments is no longer quite so tight.

If you are struggling and would like free financial counselling, you can call 0800 345 123, the MoneyTalks helpline operated by FinCap.