Getting the best Personal Loans NZ rates may seem like a very elusive goal. You know how the loan market works; lenders know how much they can get away with and will often charge outrageous interest rates just to get more money out of you. With so many choices out there for financing, it’s difficult to figure out where to start.
But it doesn’t have to be this way. If you know what loans to avoid and where to look for them, you can find the best personal loan lenders. A simple rule of thumb: the best personal loan rates for you are ones that are less than what you’re currently paying on all other unsecured debt. If the interest rates on all of your unsecured debt are higher than a personal loan offered by a reputable lender, then you’re better off doing nothing at all.
Unsecured debt like credit cards, gas cards, store cards, etc. come in two forms: secured and unsecured. With secured loans, you have to put up “security” in the form of a loan in order to get approved. With unsecured debt, you don’t need a loan to secure approval. Because there are no fees associated with unsecured debt, those upfront costs are passed onto you.
One way to consolidate debt and get better rates is to transfer balances from high-interest credit cards and other unsecured debts to a low-interest consolidation loan. By doing so, you’ll be able to consolidate all of your bills into one loan with a single payment. You can also consolidate debt by taking a secured loan (like an auto loan) and applying the credit cards towards that loan instead of the payments on them. This is another good way to lower your interest rates.
Finally, if you absolutely must take out a loan and do not have the time to deal with arranging your own financing, you should consider getting a loan from a family member or friend. If you’re unable to do so yourself, then you should look around for a loan with minimal fees and minimal interest rates and use that money to consolidate debt. It might be a better idea to pay off the debts you’ve consolidated earlier than to take out another loan to pay off the new one. That extra cash can go towards paying back the new loan sooner.
Be aware, though, that interest rates and fees vary widely among lenders. Shop around to find the best deal on your debt consolidation and make sure you understand the terms of the loan. Also shop around to find the lowest monthly payment and the longest loan term available. Ultimately, don’t forget to factor in your credit rating into your decision. A poor credit rating may prevent you from getting the best deal on your debt consolidation.