Truck Loan Personal Loans

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Truck loans can be a great way to help finance the purchase of large vehicles if you’re unable to purchase them outright, or the intended use of the truck doesn’t fit the criteria for a business loan.

What is a truck loan?

Truck loans are a type of personal loan or lease used when you want to purchase a truck or other type of vehicle that may be used for transporting goods. 

Just like most personal loans, a lender will approve you for a certain amount, which you can then use to purchase your truck. You can apply for a truck loan with your bank, specialist lenders, or by using a broker. You can also acquire a truck through a leasing company.

You can qualify for a truck loan in New Zealand if you are:

  • 18 years or over
  • A permanent NZ resident or hold a work permit or visa allowing you to reside in New Zealand
  • Currently employed with a sufficiently stable income to repay the loan amount

If you meet the standard qualifying criteria for a personal loan, you can calculate how much you can borrow to purchase your truck and compare lenders to find the best loan offers available in New Zealand before applying for a loan.

Banks are a popular option for financing truck purchases. However, most banks don’t have loans designed specifically for truck purchases, only secured or unsecured loans. 

Non-bank lenders may offer loans designed for purchasing trucks for personal use or as part of your business, while others offer unsecured loans that can be used to finance the remainder of the purchase.

Brokers are independent finance specialists who help by finding a suitable form of finance for your needs. Most brokers are paid by lenders upon successful completion of an application, so try and avoid brokers that charge up-front fees to help find you a truck loan.

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How to choose a truck loan

Choosing your truck loan will often be a little simpler than other finance choices due to the restrictions placed on your options by the vehicle itself. Secured loans generally offer lower rates, but require a new or near-new vehicle that can be used as security.

Unsecured loans and vehicle lease options are commonly used as a result, particularly if you only intend to use the truck for a limited time and don’t require ownership of it after the end of your loan term.

Secured truck loans

Are lower risk, so they usually have better rates and terms, which means you can borrow more money and it’ll cost you less overall. The downside is that if you stop making payments on your loan (and you wouldn’t) then the lender could repossess the truck, and some lenders will only allow new or near-new trucks as security. 

Unsecured truck loans

Are usually the most common option due to the age of the vehicle you intend on purchasing. Unless the truck is brand-new or only a few years old, some lenders may not accept the vehicle as adequate collateral for secured finance applications.****

A vehicle lease

Can also be used to finance a truck for business or personal purposes. If you decide to lease a truck, you won’t technically own the vehicle, but will still make regular lease payments until the end of the lease agreement, similar to how you would with a loan. 

The main benefit of a truck loan comes in the flexibility of choice at the end of the term. Most trucks that are financed won’t be brand-new vehicles, so may not qualify for a secured loan, and may be difficult to sell after you no longer require the vehicle. 

With a lease, however, you may be given the option to either purchase the truck outright at the end of the lease term for a much lower lump sum price or return the truck and lease a new vehicle that better suits your needs instead.

Truck loan costs and options

Once you’ve decided on how you plan to finance your truck purchase, your next step is to compare the available options and make sure you can comfortably afford the repayments over the lifetime of the loan or lease. 

Interest rates and fees are the biggest cost of any loan. If you can take the time to compare your options before deciding on a truck loan, try to look out for the lowest rates and smallest number of fees possible.

The term of your loan is the length of time you borrow the money and determines your regular and total repayment amounts. Most lenders offer similar terms for truck loans as they do for secured and unsecured loans, while the length of a vehicle lease for a truck will be determined by the leasing company you apply with.

Different truck loan features may offer flexibility in payments to suit your regular income frequency or allow you to trade or purchase the truck if you’re financing through a lease agreement. If you’re looking for specific loan features, make sure you clarify these with the lender before signing a loan agreement.

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