From cars and boats to holidays, weddings and even medical procedures, there are endless ways to spend a personal loan. But there are fewer options when it comes to arranging a personal loan. Do you go with one of the big banks? Or do you opt for a personal loan from one of the smaller lenders?
Thanks to quick and easy online applications, requesting a personal loan is a straightforward procedure. But as with all financial transactions, it pays to research all your options and do your homework. For example, what interest rates are on offer and how long is the loan’s term? What fees are involved? Can you pay off the loan early without penalty fees and is another lender offering better rates?
Personal loans: 5-Star Outstanding Value Winners
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 54 loans from 11 providers:
- Car Loan (Secured) – 33 rated
- Personal Loan (Unsecured) – 22 loans rated
We then awarded the four best lenders our 5-Star Outstanding Value Awards:
- The Co-operative Bank
- Harmoney NZ
- Unity
- Lending Crowd
Best personal loans: the analysis
When 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 2021 5-Star Car Loans (Secured)
- Harmoney NZ – Unsecured PL A1-A5 Credit Rating
- Lending Crowd – Secured Personal Loan A1 5 Yr Fixed
- The Co-operative Bank – Personal Loan Unsecured A++ to A Credit
- Unity – Secured Personal Loan – Orange
Canstar’s 2021 5-Star Personal Loan (Unsecured):
- Harmoney NZ – Unsecured PL A1-A5 Credit Rating
- The Co-operative Bank – Personal Loan Unsecured A++ to A Credit
- Unity – Unsecured Personal Loan – Orange
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 $155 loan establishment fee applies.
Lending Crowd
Lending Crowd is a fully online loan service with rates from 5.03% to 20.26% p.a. depending on your credit history and whether the loan is secured/unsecured.
It offers unsecured personal from $2000 to $200,000 over two-, three- and five-year terms.
Lending Crowd charges no fees for paying off a loan 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 – $20,000 | $200 |
| $20,050 – $50,000 | $350 |
| $50,050 – $200,000 | $500 |
Unity
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 personal loans from $2,000 to $60,000 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 19.99% 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 $150 establishment fee, but does not charge a fee for the early repayment of a loan.
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!
About the author of this page
This report was written by Canstar’s Editor, Bruce Pitchers. Bruce began his career writing about pop culture, and spent a decade in sports journalism. More recently, he’s applied his editing and writing skills to the world of finance and property. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.
Enjoy reading this article?
Sign up to receive more news like this straight to your inbox.
By subscribing you agree to the Canstar Privacy Policy
Share this article