If you need money in a hurry, personal loans are a quick and easy source of funds. And if you’ve a good credit history, personal loans can be relatively inexpensive, too, when compared with credit cards and overdraught facilities.
Thanks to the wide number of lenders in the market, and almost instant online approval, obtaining a personal loan is a straightforward procedure. But as with all financial transactions, it pays to do your homework and research all your options.
To help Kiwi consumers make the right financial decisions, each year Canstar’s expert research team rates and compares the major personal loan lenders in the market. For this year’s research, our team analysed 38 different loans from 11 providers. From those loans, we then awarded five our 5-Star seal of approval across our two categories, Car Loan and Personal Loan (Unsecured).
Personal loans: the top providers
Of the 11 providers in our research, just four earn Canstar’s 5-Star seal of approval:
- The Co-operative Bank
- Harmoney NZ
- Unity (formerly NZCU Baywide)
- Lending Crowd
Best personal loans: the analysis
In deciding our 5-Star winners, Canstar’s expert research team judges each loan primarily on cost, but also reviews the features and services associated with each loan. These features cover the entire loan journey, from application to closure, and include:
- Pre-approvals
- Online application
- Loan terms and eligibility, including for the self-employed
- Online repayments and management of the loan facility
- Ability to make lump-sum repayments
- Fees and penalties
- Customer service
Only the best loans are then awarded Canstar’s ultimate 5-Star seal of approval:
Canstar’s 2020 5-Star Car Loans:
- Harmoney NZ Unsecured PL A1-A5 Credit Rating
- Lending Crowd Secured Personal Loan A1 5 Yr Fixed
- Unity Secured Personal Loan – Orange
- The Co-operative Bank Personal Loan Unsecured A++ to A Credit
Canstar’s 2020 5-Star Personal Loan (Unsecured):
- Harmoney NZ Unsecured PL A1-A5 Credit Rating
- Unity Unsecured Personal Loan – Orange
- The Co-operative Bank Personal Loan Unsecured A++ to A Credit
Secured/unsecured personal loans: what’s the difference?
Personal loans are either secured or unsecured.
Secured loans:
When you use something you own, such as a home, car or boat, as security against the debt. If you’re unable to repay the personal loan, the lender may sell your asset to recover the debt. A car loan, for example, is secured against the car you are purchasing.
Unsecured loans:
The lender agrees to lend you money without you making a promise of security. If you aren’t able to repay an unsecured personal loan, the lender might take you to court. As there is more risk involved with this type of loan, lenders usually charge higher interest rates.
A closer look at the winners
The Co-Operative Bank
The Co-Operative Bank has an online application process. Its floating interest rates for unsecured personal loans range from 6.99% to 19.99% p.a. depending on your credit history.
The bank offers personal loans from $3000 to $50,000, with terms ranging from six months to five years. A $200 loan establishment fee applies.
Lending Crowd
Lending Crowd is a fully online loan service with rates from 5.66% to 19.30% p.a. depending on your credit history and whether the loan is secured/unsecured.
It offers unsecured personal from $2000 to $50,000 over two-, three- and five-year terms.
Lending Crowd has no fees for paying off loans early. However, it does charge a platform fee, which is similar to an establishment fee. This fee varies depending on the loan size:
| Amount | Platform fee |
|---|---|
| $2000 – $5000 | $200 |
| $5050 – $50,000 | $450 |
Unity (formerly NZCU Baywide)
Unity provides an online personal loan service with rates from 7.9% to 25.9% p.a. depending on your credit history and whether the loan is secured/unsecured.
It offers unsecured personal loans from $2,000 to $50,000 with terms ranging from six months to seven years. A $200 approval fee applies.
Harmoney NZ
Harmoney NZ provides an online personal loan service with rates from 6.99% to 24.69% p.a. for unsecured loans, depending on your credit history.
Loan limits range from $2000 to $70,000, with terms of either three or five years. Harmoney charges a two-tier establishment fee:
| Amount | Establishment fee |
|---|---|
| $2000 – $5000 | $200 |
| $5000 – $70,000 | $450 |
For more information, and to compare all the loan providers and products in Canstar’s extensive database, just hit the button below.
Compare personal loan providers for free with Canstar!
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