Top Tips for Smart Borrowing

Are you finally going to purchase that sweet new ride, start those much-needed home renovations or ditch your debt for good through debt consolidation?

Then you are probably in the market for a competitive personal loan. But before you sign up with the first personal loan you find, make sure you take the time to consider what type of personal loan will be best suited to your unique situation.

So to help you with smart borrowing, we rounded up these pro tips:

  1. Know your credit rating

With many personal loan providers reserving their best interest rates for borrowers with a good credit rating, it’s a good idea to know your borrowing power, so you can land yourself a personal loan with lower interest rates and fees.

If your credit rating isn’t where you’d like it to be at the moment, look outside the big banks in New Zealand, at online only specialists who will be more likely to approve you for small personal loans.

  1. Never borrow more than you need

Here’s something to consider: From the day you take out the small personal loan you will be paying interest on that amount. So take the time to carefully work out how much you will need to borrow to cover that overseas trip, debt consolidation, new car or upcoming wedding by using a personal loan repayment calculator. Because there’s no point paying interest on loan money you’re not even using!

  1. Read the fine print

When you compare personal loans in New Zealand, it can be easy to be dazzled by the best interest rate you see. But if you don’t read the fine print, you could end up being caught out by the bite of a hidden fee, tucked away in the product disclosure statement.

If you’re considering a fixed interest rate personal loan, it’s important to keep in mind there may be a break cost or exit fee if you try to pay off the personal loan sooner.

Other things to look for in the fine print include the application fees and ongoing fees that could put an extra dent in your pocket, if you didn’t realise they were there in the first place.

  1. Ask questions

Let’s be honest, personal loans can sometimes be confusing to understand, especially with all the financial mumbo jumbo that gets thrown around. So if you ever find yourself confused, simply get in touch with the team at Rapid Loans New Zealand, for an explanation of the personal loan terms, features and fees.