Need Cash? Discover These Personal Loan Options In NZ

Contents:

• What is a personal loan? 
• What you need to know before getting a personal loan
• Different personal loan options in NZ 
• Personal loan vs Credit Card

Do you need funds to pay bills, travel expenses, or to make financial arrangements for a special event? You may want to consider applying for a personal loan.

What is a personal loan?

A personal loan is a financial assistance where you borrow money from a lender, with an interest. You can use the money for different purposes like consolidating debt, buying a car, paying the mortgage, a wedding, or even using the money for a vacation.

What to know before getting a personal loan

• Online application - Most lenders offer online applications that can be accessed via a website or a mobile app. Depending on the application types offered by the lender, it can be done by phone or in the nearest branch, which usually takes one to a few days. 
• Contract terms - Once your application is approved, you will be asked to sign a loan contract outlining the terms and conditions of the loan. These terms include the loan term (between three months to seven years), the fees you must pay, and the interest rate you will be charged on the borrowed amount and the repayment period (weekly, fortnightly, or monthly).
• Additional fees - Aside from the loan amount itself, lenders also charge costs for loan establishment, default, and dishonour. Other fees may be applied depending on the loan contract between you and your lender, like early repayment or documentation fees.
• Loan types - Applicants can choose an unsecured or secured loan, or whether the loan will be applied for debt consolidation, car financing, bad credit, and other purposes.

What are the different personal loan options in NZ?

Secured loans

A secured personal loan is one where your lender asks for collateral, which is usually in the form of a vehicle, property, or other valuable thing you own. If you fail to repay your debt, these properties will be used as collateral.

Unsecured loans

An unsecured personal loan does not require any form of collateral. However, unlike a secured loan, this type of loan has stricter requirements.

Read: Car Finance vs. Personal Loans 

Emergency loans

An emergency loan can be used to cover unexpected expenses such as auto repairs, loss of employment, illness, a funeral, or other unforeseen incidents. If you find yourself in one of these circumstances and don't have enough savings to get through it, you might want to consider getting a personal loan.

Debt consolidation loan

Taking out a debt consolidation loan lets you combine multiple loans into one, with a considerably lower interest rate and fewer costs.

Holiday loans

Travelling is one of the best investments you can make. Taking out a personal loan is one of the viable options for funding your holidays or vacations without spending loads of money and allowing you to save up for other things.

Home loans

Buy a house, or start building from the ground up with the help of a home loan. This may also come with a collateral, depending on the institution you choose to borrow from.

Wedding loans

Don’t wait another year to achieve your dream wedding. A personal loan for weddings with a low-interest rate can be used to pay for the venue, materials, professionals, and other wedding-related expenses.

Business loans 

Manage cash flow and purchase assets with a business loan. This can work especially if you're just starting out or want to expand into a new business.

Read: How 'Salary Sacrifice' In NZ Can Set You Up For A Better Future

Should I get a personal loan or use a credit card?

Personal loans and credit cards are both financial options for short-term or long-term expenses. Getting a personal loan is recommended if you require a large sum of money to cover an emergency, or do not have enough money in your bank account. A credit card, on the other hand, is designed for people who do not want to carry cash when shopping. It's also a convenient way to buy anything from the store or pay bills.

Do you need to finance your business, travel, or get married? A personal loan could be a smart option for you! Use glimp's Personal Loan Calculator to see which loan offer is best for you.