Personal Loan Interest Rates and Fees

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  • Quotes from multiple New Zealand lenders
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Before comparing interest rates you should decide what type of loan you want - secured or unsecured, fixed or variable interest rate. Then when comparing loans from lenders, make sure you’re only comparing the rates of the type of loan you’re after.

If a lender finds you a high-risk borrower, they may offer you a higher interest rate. If you have a bad credit history, have been bankrupt, or have an irregular income, you may want to consider improving your application in other ways before applying.

Here’s what to consider when comparing loan offers and their interest rates and fees.

Personal Loan Interest Rates

Most lenders will display the interest rates for their personal loans on their websites and other advertising. 

Comparison rates express the true cost of a personal loan (Interest plus fees) as a simple percentage. When comparing various loan offers from multiple lenders, try to find the comparison rate to ensure you are accounting for all fees and potential charges.

To compare interest rates for personal loans, you can:

  • Visit loan comparison sites to get an idea of what’s available. 
  • Visit lender websites and read reviews of their available loan products.
  • Speak to a personal finance broker. 

Personal loan rates that lenders advertise aren’t necessarily the rates you will be offered, largely due to how lenders use risk-based interest rates when assessing individual applications.

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Personal loan interest rates comparison

Interest is almost always the biggest cost of any personal loan, so when you’re shopping around it should be at the front of your mind. Take the time to compare rates from non-bank lenders, brokers, banks and credit unions to make sure you’re getting the best deal possible.

You’ll also need to consider what type of interest rate is right for you: 

  • If you plan to pay your loan off early to save on interest, a variable rate will generally not include extra charges or fees when making additional, early repayments. 
  • On the other hand, if you plan on repaying the minimum amount over the entire loan term, a fixed interest rate may be more suitable. 

Fixed rates are often a little lower than variable rates, and they provide a certainty that makes budgeting and meeting repayments easier. 

It’s always a good idea to compare loan options and lenders before applying for a personal loan, this way you’ll have a better chance of getting the best deal for your unique financial circumstances and need for a loan.

Personal Loan Fees

Loan charges include establishment fees, monthly fees and annual fees. They can also include charges for late payments, or early repayments if your lender includes these in your loan agreement. 

Fees are important to understand before applying, as they can make the total costs and advertised rate of a loan seem lower than they truly are.

Comparing your options to find a loan with the lowest fees will be an important aspect to consider when looking to refinance a personal loan.

These are four types of fees you should be aware of when comparing lenders for a personal loan:

  • Upfront costs which include establishment fees and application fees
  • Ongoing fees which include annual fees and monthly fees
  • Late fees which are charged if you miss a payment
  • Extra repayment fees which are charged if you make early repayments to reduce the amount of interest payable on the principal amount.

If you’re planning on repaying your loan early, make sure you look for any additional charges set out by your lender that relate to these. You may be charged fees for repaying your loan early or making additional repayments, or both.

Choosing a personal loan without any fees or penalties for early repayments will allow you to repay your loan earlier and save on interest, either by lowering your monthly repayments or reducing the term (total number of repayments) on your loan.

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