Bad credit personal loans are a type of personal loan product offered by specialist lenders in New Zealand and can allow you to borrow money with a bad credit history.
Bad credit personal loans will often have shorter borrowing terms, higher fees and higher rates than other types of personal finance as there is more risk to the lender in approving the loan.
A bad credit personal loan is similar to other types of personal loan except tailored for people who have been bankrupt or had defaulted on repayments in the past.
You can apply for bad credit loans with most specialist lenders, and the rates and fees applied to your bad credit loan will be determined by your lender during the approval and agreement process.
You can qualify for a bad credit personal loan in New Zealand if you are:
If you meet the standard qualifying criteria for a bad credit personal loan, you can calculate how much you can borrow and compare lenders to find the best loan offers available in New Zealand before applying for a loan.
Bad credit personal loans are used when you have a low credit score. Your credit score reflects your credit history and is a number between 0 and 1000 that reflects an estimate of your financial stability over time.
There are three credit reporting bureaus in New Zealand, and you can request a free copy of your credit report from any of them.
If you’ve made mistakes in the past, these can lower your credit score and make it hard to get approved for a loan:
Thankfully, your credit history and score improve over time when you show good financial behaviour:
All these actions can improve your credit score, including making consistent repayments on your new loan. If you can, examine and repair your credit score before you apply for a loan; that way you’ll have a better chance of being viewed in a positive light by lenders.
Bad credit personal loans are used to finance when you may not qualify with traditional lenders for standard loans. If you apply for a bad credit personal loan, you’ll want to make sure you get the best deal possible, with repayments you can easily manage.
Find ways to pay less interest on your personal loan, pay the loan off faster, make extra repayments and find a loan with as few fees as possible.
Specialist lenders in New Zealand offer bad credit personal loans with a simple online application. However, this type of finance will generally feature higher interest rates, high fees and shorter terms than traditional loans.
Before you apply, make sure you’ve considered any available government assistance schemes, and spoken to a financial adviser to accurately assess your borrowing capacity and financial stability.