Cheap Personal Loans
Get a personal loan up to $70,000 from 6.99%
Updated January 2018
TLDR Personal Loans Summary
Best Buys - loans under $10,000
Secured Loans
Unsecured Loans
Best Buys - loans under $10,000
Secured Loans
- NZCU Baywide 8.90% $200 fee
- The Co-operative Bank 10.50% $200 fee
- TSB Bank 10.84% $250 fee
Unsecured Loans
- NZCU Baywide 11.90% $200 fee
- TSB Bank 14.95% $150 fee
For those who need a personal loan, you can get a loan from 6.99% using peer-to-peer lenders which leaves the bank interest rates (10%+) in the dust.
Borrowing is a serious decision and needs to be carefully planned and budgeted for. This step-by-step guide outlines everything you need to know about getting a personal loan and gives tips to make it as cheap and stress-free as possible.
Borrowing is a serious decision and needs to be carefully planned and budgeted for. This step-by-step guide outlines everything you need to know about getting a personal loan and gives tips to make it as cheap and stress-free as possible.
Best Buy Personal Loans
In this Guide:
What is a personal loan?
A personal loan is a loan that you pay back over a set period of time on a periodic basis, i.e. you borrow $5,000 and pay it back every month for 2 years. The lender charges you interest on the $5,000, as well as a one-off fee, and you repay both the money your borrowed as well as the interest. Personal loans are popular, easy to obtain and offer convenience for many New Zealanders.
The advantage of a personal loan is that you have access to money immediately while spreading the repayment over a period that suits your budget, be that weeks, months or years.
This guide highlights the cheapest personal loans available, their pros and cons, as well as looking at other finance options such as credit cards and overdrafts which may cost you less.
The advantage of a personal loan is that you have access to money immediately while spreading the repayment over a period that suits your budget, be that weeks, months or years.
This guide highlights the cheapest personal loans available, their pros and cons, as well as looking at other finance options such as credit cards and overdrafts which may cost you less.
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Who gets a personal loan? What Can I Use a Personal Loan For?New Zealanders from all walks of life apply for personal loans every day. The most popular reasons include debt consolidation, big one-time expenses such as weddings or funerals, as well as urgent money needs such as car repairs, medical bills or children expenses. But there are thousands of other reasons people get personal loans, and if you meet the criteria and get approved you are free to spend the money on what you want to such as home renovation and holidays.
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What is a secured loan? What is an unsecured loan? What’s the difference?
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How much can I borrow? When do I need to repay it?Most banks have a minimum borrowing amount, which is around $2,000. Because personal loans are flexible, there is no maximum amount you can borrow nor a date you need to pay it all back by. Lenders take into account your income, credit history and savings levels among other things when they assess your ability to repay a personal loan. In doing so, they will also determine a range of suitable repayment terms.
Our Tip: To have a happy borrowing experience, borrow as little as you need and repay it as quickly as possible. This limits the interest you pay on the loan. Caution – while borrowing over a longer period means lower monthly repayments, it massively increases the amount of interest you will repay overall. For example, borrow $10,000 at 15% over two years and the interest cost is $1,600. Borrowing the same over 5 years and it’s $4,300! |
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What are the best loans for my needs?We recommend our popular Personal Loans Best Buy Guide below for the most suitable, affordable and attractive offers in today’s market.
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Will a personal loan affect my credit rating? What happens if I can’t repay my personal loan?
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Credit Card Alternative - Is a credit card better than a loan?
- The answer is “it depends”. If you need a small amount of money and could pay it back in a number of days, then a credit card is probably better than a personal loan. You can withdraw the money from an ATM and pay it back once you are able to, minimizing the interest charged. However, if you need a reasonable amount of money (say $10,000+) which will take some time to pay back, then a personal loan is likely to be more suitable.
- For loans of less than $10,000, many cheap credit cards undercut the cheapest loans, so using a credit card to finance your loan should be a priority.
- A number of New Zealand banks offer 0% balance transfer credit cards. The process is simple – simply apply for a new card with a bank you don’t currently have a credit card with, and once approved you can transfer your existing credit card debt to the new card paying 0% interest. The offers usually last for 12 months, and if you are still struggling to pay off the balance, you can organize a further balance transfer with another bank.
Using a 0% balance transfer card proactively.
Example:
Total cost of debt: $0 + $35 credit card fee (Bank 2)
Total cost had Alice used a personal loan: Using the best interest rate (14.95%), interest of $412 and a $250 application fee would be charged (total $652) as well as the obligation for monthly repayments of around $450.
The credit card balance only works when you need a loan for something you can purchase with a credit card. Some retailers don’t, and many personal loans involve non-retail transactions (car loans, mortgage repayments etc). Still, in many cases a personal loan won’t be the cheapest option.
Our Personal Loans Best Buy Guide below gives the best answer for your specific needs.
- Alice needs to pay for her wedding reception and honeymoon six months before her wedding, at a cost of around $5,000.
- Alice applies for a new credit card with her existing bank (Bank 1), and once approved she charges these expenses to her new card. Knowing she cannot repay the $5,000 the following month, Alice applies for a balance transfer with Bank 2 and is approved.
- Alice agrees to repay 2% of the balance every month (standard terms) and is charged 0% interest for 12 months.
- A few months after her wedding, Alice has enough money saved to repay the Bank 2 credit card and transfers the amount owing. The debt is cleared after 12 months.
Total cost of debt: $0 + $35 credit card fee (Bank 2)
Total cost had Alice used a personal loan: Using the best interest rate (14.95%), interest of $412 and a $250 application fee would be charged (total $652) as well as the obligation for monthly repayments of around $450.
The credit card balance only works when you need a loan for something you can purchase with a credit card. Some retailers don’t, and many personal loans involve non-retail transactions (car loans, mortgage repayments etc). Still, in many cases a personal loan won’t be the cheapest option.
Our Personal Loans Best Buy Guide below gives the best answer for your specific needs.
Can I get a loan from my employer?
The answer is “possibly, but you’ll need to ask”. If the answer is no, they may provide salary in advance. Talk to your employer – these loans will be the cheapest you can get.
Personal Loans Best Buys Guide
If you're looking for a personal loan, our Best Buys guide has you covered. We list loan offers by borrowing amounts, unsecured and secured loans, repayment terms (from 1 to 20 years) and display all application fees.
Fixed monthly payments
A personal loan, sometimes called an unsecured loan, is different from an overdraft or credit card because it allows you to borrow a fixed amount over a fixed term, usually at a fixed rate of interest.
For example, you might borrow $10,000 over three years at 9%. You therefore know at the outset how much you have to pay back each month, as well as the total cost of the loan, making it easier to budget.
For example, you might borrow $10,000 over three years at 9%. You therefore know at the outset how much you have to pay back each month, as well as the total cost of the loan, making it easier to budget.
Loan fees
All Kiwi lenders charge a fee of setting up a personal loan, ranging from $100 to as much as $750, and possibly higher. Additionally, there may be “early repayment fees” which are charged if you pay back loan before its due.
Alternatives to personal loans
A personal loan is the right choice for many borrowers given the long-term repayment flexibility. However, there are many alternatives for shorter periods. If you need urgent cash for only a few days, withdrawing money on your credit card or going into overdraft is likely to be cheaper than arranging a personal loan.
If you are looking to consolidate credit card debt, applying for balance transfer credit cards (LINK) is also likely to be cheaper than a personal loan and provide lower interest than your existing credit cards.
If you are looking to consolidate credit card debt, applying for balance transfer credit cards (LINK) is also likely to be cheaper than a personal loan and provide lower interest than your existing credit cards.
Compare loan rates
Personal loan interest rates (LINK) vary a lot; for a full list visit our up to date summary page of all the best loans and their application fees. If you are searching for a personal loan, we recommend CANSTAR’s interest rate comparison service (https://www.canstar.co.nz/compare/personal-loans/) which shows a number of banks and finance institutions’ current offerings for any loan - big or small, short term or long term.
Best Buy personal loans
| CHEAPEST STANDARD RATE | LENDER AND REPRESENTATIVE APRS (ALL RATES OVER 1-5 YEARS UNLESS STATED) |
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| Cheapest loans under $10,000 | |
| Cheapest loans for $1,000 - $9,999 | Secured Loans NZCU Baywide 8.90% $200 fee The Co-operative Bank 10.50% $200 fee TSB Bank 10.84% $250 fee Unsecured Loans NZCU Baywide 11.90% $200 fee TSB Bank 14.95% $150 fee |
| Cheapest loans $10,001+ | |
| Cheapest loans for 10,001 - $25,000 | Secured Loans Harmoney 6.99% upwards - $500-$1250 fee^ Early repayment fees? Yes/No NZCU Baywide 8.90% $200 fee The Co-operative Bank 10.50% $200 fee TSB Bank 10.84%,$250 fee Unsecured Loans Harmoney 6.99% upwards - $500-$1250 fee^ NZCU Baywide 11.90% $200 fee TSB Bank 14.95%,$150 fee |
^Harmoney – the Essentials
Harmoney is…….
Harmoney is…….
Our Advice:
- Credit cards are the best place to start for urgent expenses, and balance transfers are excellent for special purpose spending.
- If your credit card won’t suffice, look at an employer loan.
- Failing that, if you are prepared to try a new method of lending, Harmoney is the best peer-to-peer on lender on offer despite the hefty $500+ application fee.
- Beyond Harmoney, NZCU and TSB offer attractive application fees and the lowest interest rates for both secured and unsecured loans.
- Remember, borrowing for a shorter period of time saves you hundreds if not thousands in interest costs. Use our loan calculator to see the difference.
- Do not rush into getting a personal loan until the purpose or need has settled.
