How to Get a Loan with Bad Credit in New Zealand

Explore your options, understand the risks, and find out how to secure a loan even with a poor credit score.

Having bad credit doesn’t mean you’re completely shut out from borrowing money. In New Zealand, there are several lenders who specialise in helping individuals with less-than-ideal credit scores. However, getting a loan with bad credit requires some smart planning, awareness of potential pitfalls, and a willingness to explore alternatives.

What is Bad Credit?

Bad credit refers to a history of missed payments, defaults, or other negative marks on your credit report. This results in a low credit score, usually below 500. It signals to lenders that you may be a higher-risk borrower.

Can You Get a Loan with Bad Credit?

Yes, you can. Many finance companies in NZ offer bad credit loans or second chance finance. These loans typically come with higher interest rates and stricter terms. Some lenders may require a guarantor, security such as a vehicle, or proof of stable income to approve your application.

Types of Loans You Can Get with Bad Credit

• Personal Loans: Unsecured or secured, depending on your risk profile.

• Car Loans: Often secured against the vehicle.

• Payday Loans: Short-term loans with high interest — generally not recommended.

• Guarantor Loans: Requires a co-signer with good credit.

• Secured Loans: Loans backed by an asset (e.g., car, property).

Tips to Improve Your Loan Approval Chances

1. Check Your Credit Report First
   Request a free report from Centrix, Equifax, or illion. Correct any errors that may be dragging your score down.

2. Provide Proof of Stable Income
   Lenders are more likely to approve you if you can show consistent income from a job, benefit, or self-employment.

3. Offer Collateral
   If you have a car or property, consider using it as security to reduce the lender’s risk.

4. Avoid Multiple Applications
   Every hard inquiry affects your credit. Focus on lenders that offer pre-approval checks without affecting your score.

5. Consider a Co-Signer
   A friend or family member with good credit can boost your approval chances if they’re willing to act as a guarantor.

Risks of Bad Credit Loans

• High Interest Rates: You may pay more in the long run.

• Extra Fees: Late payment fees, setup charges, or early repayment penalties may apply.

• Predatory Lending: Watch out for lenders that target vulnerable borrowers with misleading terms.

Reputable Lenders for Bad Credit Loans in NZ

• Avanti Finance

• Geneva Finance

• Finance Now

• MTF Finance

• Nectar

• Harmoney (if your score is not too low)

Always compare the terms, interest rates, and fees before choosing a lender.

FAQs

1. Can I get a loan without a credit check in NZ?
Most reputable lenders conduct some form of credit check. Be wary of lenders offering “no credit check” loans — they may charge extremely high interest.

2. What’s the easiest loan to get with bad credit?
Secured loans or loans through finance brokers who specialise in bad credit customers are generally easier to get approved.

3. Will I need a guarantor?
Not always, but it can increase your chances if your credit score is very low or if you have little income.

4. Should I take a payday loan?
Payday loans should be your last resort due to extremely high fees and interest rates.