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How to get your debt down for a personal loan Hero Image

26 July 2021 | By Lending People

How to get your debt down for a personal loan – the checklist

If you're wondering how easy it is to get approved for a personal loan, allow us to take you through some of the criteria. Go into your application with your eyes open.

Got some big plans but need a helping hand to achieve them? That’s where a loan might come in. If you’ve never had a loan before, you might be feeling a bit apprehensive about the approval process. Put your mind at ease – we’re going to talk you through the approval checklist. Here’s an insight into what lenders are looking for:

· How old are you?

First, the easy stuff – age may be just a number, but you still have to be over 18 to apply for a loan. If that’s your, congrats – you’re one step closer to getting approval.

· Have you got a photo ID?

You’ll need to show your passport or a current NZ driver’s license in your loan application.

· Do you have the right to work in New Zealand?

If you’re a New Zealand citizen or resident, you’re good to go. You may also be eligible for a loan if you have a valid work visa, so long as it doesn’t expire before your loan terms. That means your loan will need to be repaid in full (with interest) before your visa is up.

· Do you have a job?

The general rule is that you need to have some form of income approved for a loan and comfortably afford the repayments. It can be full time or part-time (self-employment is also fine). So long as your role is permanent and you’ve been in the job for three months or longer, that should be enough to prove that you have consistent income. This brings us to this next point…

· How’s your income looking?

A responsible lender won’t approve a loan if there are doubts that you can afford the repayments comfortably. If you can’t, it’s not good for anyone. The exact amount you need to be earning will depend on the size of your loan, how quickly you’re paying it off and what other expenses you have. Most people need to be earning over $500 a week to be approved for even a small loan.

· How much do you want to borrow?

The bigger the loan, the bigger the repayments. We offer loans between $2,000 – $75,000. Before we approve anything, we’ll look at your income and expenses and then decide on the maximum loan that you can afford. You can choose to take on a loan smaller than that if you wish.

· What is your bankruptcy status?

People who have declared bankruptcy aren’t eligible for loans. Bankruptcy normally takes about three years to be discharged and 7 up to 7 years to drop off your file. Once you’ve been cleared, then you’re welcome to apply for a loan.

· What is the state of your financial conduct?

When you apply for a loan, the lender will review your credit report as well as your bank statements to get an idea of things like whether you pay your bills on time, whether you’re into gambling, how often you slip into overdraft – basically, whether you can be relied on to make the loan repayments. Credit scores aren’t everything, and it’s entirely possible to get a loan if your score has seen better days, but a healthy score will usually mean better loan terms. You can find out more about credit reports here.

That’s the checklist! How did you do? If you’re interested, you can apply for a loan online here. It’s super easy, and you’ll have your answer in 60 seconds. Our process won’t affect your credit score, and there are no obligations to follow through with the loan if you’re approved. If you want to talk to someone about your options, one of our advisers will be happy to help. Feel free to get in touch.

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¹Fees: We do not charge a fee to use our service (commonly referred to as a platform fee, broker fee, or referral fee) if you are an existing customer who has previously entered into a personal loan that we arranged on your behalf; or you do not enter into a personal loan arranged by us. A fee to use our services is applicable in all other cases. See our Terms & Conditions for the applicable fees.

²Annual Interest Rate (AIR): The AIR offered by our Personal Loan providers ranges from 6.95% p.a. to a maximum of 26.95% p.a.

³Annual Percentage Rate (APR): Also known as the 'comparison rate', the APR is calculated by adding together the AIR plus any additional fees that may apply (like establishment fees charged by providers). New Zealand law does not require APR disclosure, but doing so can better highlight borrowing costs. The APR offered by our Personal Loan providers ranges from 7.80% p.a. to a maximum of 27.91% p.a. The APR is accurate only for the representative example given below and may not include all fees like early repayment fees (if any). Different terms, fees or other loan amounts might result in a different APR.

⁴Minimum and Maximum Repayment Terms: Repayment terms offered by our Personal Loan providers range from 12 months to a maximum of 84 months.

Representative Example of the Total Cost of a Loan: If you borrow $20,000 over a repayment term of 36 months at an AIR of 6.95% p.a., your total repayments will be $22,493 (made up of $20,000 principal, interest charges of $2,243, and an establishment fee of $250). This example assumes monthly repayments and does not include premiums for any optional insurances, fees for using our services (if any) or default fees.

⁵Terms and Conditions: Our services are provided in accordance with our Application Terms & Conditions. All approvals are subject to provider credit criteria and responsible lending requirements. The loan amount and interest rate offered will depend on your circumstances, the type of lending required, and the security (if any) provided will reflect the loan amount and interest rate offered by the provider. Provider establishment fees, terms, and conditions apply.