Kerry, Whangarei
Are you a first-time borrower who wants to understand the process?
Navigating your first loan can be daunting, but proper guidance, information and talking to the right company can help you make informed decisions and secure the financial support you need.
This blog outlines some essential tips to help you successfully navigate your first loan journey.
Understanding Your Personal Loan Options
Individuals and businesses can take out loans for various reasons, including personal loans, debt consolidation loans, car loans, car repairs, travel and holiday loans, medical loans, emergency loans, funeral loans, and business loans. When considering the right loan, evaluating factors such as the loan type, loan amount, repayment period, interest rate, and the company you are borrowing from is essential.
For example, the benefits of a secured loan, which requires collateral, are that it can offer lower interest rates and assist with increased appeal for finance companies to approve future lending.
It's essential to understand the terms and conditions of any loan, including the interest rate, repayment schedule, and any collateral requirements. At Future Finance, we always fully disclose to you verbally over the phone so you understand what the loan costs and, importantly, what the total loan will cost you. You also have a chance to ask any questions you may have.
Preparing for a Loan Application
When preparing for a loan application, assessing your credit history and gathering the necessary documents is essential and will help to speed up the application process. Your credit history can impact your loan eligibility and interest rate and is something to remember when applying for loans.
You can check your credit history through online credit reporting agencies. Below is a list of commonly required loan application documents.
For a loan application, some typical documents may include:
- Passport/Visa
- Driver's Licence
- Bank statement
- Income information (e.g., salary, business income, or rental income)
- Regular expenses and commitments
- Balance of debts
For a business loan application, some required documents may include:
- Minimum trading history
- Identification
- Bank account statements
- Tax returns (if relevant)
At Future Finance, we like to keep things simple; not all of these documents may be required.
Gathering some of these documents before you apply will streamline the application process and increase the chances of our team approving it faster. Simply apply, and we will advise you on which information or documents we need to assess your loan application.
Navigating Loan Terms and Conditions
When navigating loan terms and conditions, it's essential to understand the basics of financial terms such as interest rates, fees, and repayment terms. Interest rates can be fixed or variable, impacting monthly payments and the overall loan cost. Always read the loan agreement's fine print to prevent any surprises.
Lenders must legally provide essential information about the loan in writing, known as a disclosure document, and help borrowers understand the commitment before signing up. This includes discussing the critical information in the disclosure document and answering any questions to ensure clarity.
Borrowers should pay attention to the interest rate, fees, and repayment schedule and ask the lender for clarification if any part of the loan agreement is unclear.
Reading through the contract before signing can help avoid unpleasant surprises and ensure you are signing up with a finance company that is best suited to you.
Managing Your Loan Responsibly
Responsible lending principles have been put in place to protect borrowers, and lenders must act carefully and responsibly at all times, treating borrowers reasonably and respectfully.
The Responsible Lending Code in New Zealand outlines the importance of borrowers reading the terms and conditions of any loan contract, asking questions, and providing all relevant financial documents to the lender to prove their financial situation. The government has made these practical amendments to the responsible lending rules to ensure that lending is affordable and suitable to all borrowers.
Responsible loan management is the borrower's responsibility and a legal obligation for lenders. Borrowers are encouraged to proactively understand their loans' terms and conditions and seek assistance if they encounter financial difficulties.
Start Your Financial Journey with Future Finance
Navigating your first loan might seem overwhelming, but with the right expertise and support from the right company, you can make well-informed decisions and manage your loan responsibly. That’s where Future Finance can help.
Don't hesitate to reach out to us at Future Finance. Our team is here to help you find personalised lending options based on your unique situation. They are proud to be NZ’s only 5-star finance company on TrustPilot. We’re Kiwis helping Kiwis.
All it takes is a friendly conversation with one of our expert team to get the ball rolling. Our loan process is simple and tailored to your individual needs. We’ve helped thousands of Kiwis towards their financial goals, and you can see our impressive 5-star Trustpilot reviews here!
Whether you're looking for quick loan approval or need guidance on responsible borrowing, we're here to help you achieve your goals.
You can apply online or contact our team on 0800 25 10 10 for a 5-star lending experience.