If you are a New Zealander and you are considering a loan of any description, there are a number of things that you must consider. A loan is a commitment and any commitment over a time period must be considered carefully.
Table of Contents
Reason for Purchase
The first consideration should be around the purpose of your loan. What do you want your loan for? Is this purchase important to you, is the loan for an essential purchase or is it for a necessary service and therefore something that you can’t do without or is it for pleasure purposes? Consider the purpose carefully and if it is a purchase that could wait or a purchase that you may tire of, think carefully as you will be tied to the loan for a fixed period of time, often years, so weigh everything up and make sure that a loan is the way to go for you.
Once you have decided that a loan would, in fact, be a good idea, you need to carefully weigh up what you can afford. Consider all of your current payments, TV, Phone, gas, electricity, car, mortgage or rent and anything else that you pay monthly. You also should factor in the cost of travel, to and from work and other trips that you may make for pleasure purposes, whether that be the cost of gas for your car or the cost of trains, buses or taxis. What about a clothes budget, how much would you normally spend per month and what about nights out whether for business or pleasure.
Add everything up and then take your expenditure away from your earnings to see what you are left with. It may be that you have a healthy amount left, in which case your loan payment should not be too much of a problem but if you have little or nothing left, it may be that you could cut some of your usual expenditure but bear in mind that if you cut it too much, you are likely to become very weary of the burden of your loan payment, so do your sums and think about what you can comfortably afford after all there can be some serious consequences for yourself if you were to default on your loan payments.
You also should consider your present circumstances but not only that, project a bit into the future and consider what your life may be like during the duration of the loan. Of course, no one can predict the future and that would not be expected but we can look a bit towards the future and do our best. For example, consider your job, is it a steady job or is it temporary and if it is temporary, how do you plan to make all of your payments if your loan term extends beyond the point of your job ends? Are you just going to hope that you will find another position or hope that your contract is extended? Are you planning a major change like moving home and if so, how will that impact on your affordability? Are there any other changes planned, you may be planning to start a family, for example, or you may be needing to buy a new car. So, do your best to examine your circumstances before making your final decision.
Type of Loan
Once you have made your assessment and you have decided what you can afford, you then have to decide which type of loan you are going to choose. Essentially, there are two main types of loans, one is a secured loan and the other is an unsecured loan. A secured loan, as the name would suggest, is a loan which is secured against an asset, which would commonly be a house or a car. If you default on any of your payments, the asset could be sold to pay the lender back what is owing. An unsecured loan has no protection for the lender and if you default, there is no collateral to sell. The type of loan will determine the cost. You can apply for a mortgage, a home improvement loan, a car loan, a student loan and so on.
Length of Loan
You must then decide the length of time that you will need the loan, it may be that you are going to have a wage rise in a couple of years and the loan may be something that you need just now. It may be that you have become short of cash but will be able to pay the loan back with your next paycheck. Obviously the longer the period of the loan, the cheaper your monthly payments but longer loans will involve more interest payments overall.
Cost of the Loan
Loan rates are typically quoted using an APR or annual percentage rate and simply put, the higher the number, the more interest you will pay. Different loans will command different APR’s and secured loans tend to have more favourable rates as they are less of a risk to the lender. Your circumstances, your creditworthiness, your earnings, and your reliability will all impact on the rate of interest that you are offered. Essentially, the lender has to be sure of getting their money back and so will work to minimise their risk as much as possible, so if you are considered a ‘good risk’, you may be offered more favourable terms. By adding up all of your payments over the term of the loan and then subtracting the amount you borrowed initially will give you the total amount of interest that you will be paying on the loan.
You then have to go about finding a reputable company who will offer you a loan and that can involve speaking to your local New Zealand neighbours and doing some searching through online or social media reviews. It is important that you find a company that you can trust, you want their terms and conditions to be transparent and not have any hidden or misleading clauses. QuickLoans are a company who have been around for 15 years and have been tried and tested by New Zealand residents. They are well reviwed and offer a robust and reliable service and guarantee to offer very competative rates on all of their loans. They offer a range of loans for a range of purposes.
Applying for Quick Loans is a straightforward and easy process and the company have deliberately set it up that way as they understand that people have their own busy lives (a simple application is really helpful as some applications to some lenders can involve a great deal of stress). The application is made online so there is no need to print off, complete and post, which all takes time and effort. Once your application is received, it will be dealt with very quickly and often a decision can be made and the requested loan amount paid to you within the same day which is great news if you are in a position where you need the money quickly.
Also important is a good, solid and experienced customer support team and QuickLoans provide that too. They are open during normal business hours from Monday through Friday and if you are calling outside those hours, there is an answering service which you can use. The team will be able to answer any of your questions prior to your application and will be there to help you during the process and after you have received the loan. QuickLoans is a company who are prepared to work with their customers to achieve the best outcome. As they have been in business for a number of years, it is indicative of the fact that they have listened to their customers and worked to accommodate them by making changes to their products and services.
QuickLoans have an extremely user-friendly website which contains a lot of information about the company and about applying for a loan in general. They detail the various loans that they offer and explain the use of each one. There is also a handy loan calculator available on the site which you can play around with to establish weekly, fortnightly or monthly payments. You would enter the amount that you wish to borrow and the repayment term to obtain the information. It is a good way to establish the amount to apply for according to your own affordability calculations. The site also contains testimonials from previous customers.
In summary, if you are applying for any loan, take your time, assess all of your circumstances and above all, use a reputable lender. If you do run into payment difficulties, it is always a good idea to contact your lender as soon as possible so that your terms can be renegotiated or other arrangements made. This can prevent further, more serious action.