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25 July 2021 | By Lending People

How to get your debt down for a personal loan – the checklist

If you're wondering how easy it is to get approved for a personal loan, allow us to take you through some of the criteria. Go into your application with your eyes open.

Got some big plans but need a helping hand to achieve them? That’s where a loan might come in. If you’ve never had a loan before, you might be feeling a bit apprehensive about the approval process. Put your mind at ease – we’re going to talk you through the approval checklist. Here’s an insight into what lenders are looking for:

· How old are you?

First, the easy stuff – age may be just a number, but you still have to be over 18 to apply for a loan. If that’s your, congrats – you’re one step closer to getting approval.

· Have you got a photo ID?

You’ll need to show your passport or a current NZ driver’s license in your loan application.

· Do you have the right to work in New Zealand?

If you’re a New Zealand citizen or resident, you’re good to go. You may also be eligible for a loan if you have a valid work visa, so long as it doesn’t expire before your loan terms. That means your loan will need to be repaid in full (with interest) before your visa is up.

· Do you have a job?

The general rule is that you need to have some form of income approved for a loan and comfortably afford the repayments. It can be full time or part-time (self-employment is also fine). So long as your role is permanent and you’ve been in the job for three months or longer, that should be enough to prove that you have consistent income. This brings us to this next point…

· How’s your income looking?

A responsible lender won’t approve a loan if there are doubts that you can afford the repayments comfortably. If you can’t, it’s not good for anyone. The exact amount you need to be earning will depend on the size of your loan, how quickly you’re paying it off and what other expenses you have. Most people need to be earning over $500 a week to be approved for even a small loan.

· How much do you want to borrow?

The bigger the loan, the bigger the repayments. We offer loans between $2,000 – $75,000. Before we approve anything, we’ll look at your income and expenses and then decide on the maximum loan that you can afford. You can choose to take on a loan smaller than that if you wish.

· What is your bankruptcy status?

People who have declared bankruptcy aren’t eligible for loans. Bankruptcy normally takes about three years to be discharged and 7 up to 7 years to drop off your file. Once you’ve been cleared, then you’re welcome to apply for a loan.

· What is the state of your financial conduct?

When you apply for a loan, the lender will review your credit report as well as your bank statements to get an idea of things like whether you pay your bills on time, whether you’re into gambling, how often you slip into overdraft – basically, whether you can be relied on to make the loan repayments. Credit scores aren’t everything, and it’s entirely possible to get a loan if your score has seen better days, but a healthy score will usually mean better loan terms. You can find out more about credit reports here.

That’s the checklist! How did you do? If you’re interested, you can apply for a loan online here. It’s super easy, and you’ll have your answer in 60 seconds. Our process won’t affect your credit score, and there are no obligations to follow through with the loan if you’re approved. If you want to talk to someone about your options, one of our advisers will be happy to help. Feel free to get in touch.

This blog is provided for general information purposes and is not a recommendation you enter into or exit any particular loans or insurance policies. Information on the blog does not take into account your particular circumstances, including your objectives, financial situation or needs. We recommend you seek advice from a financial adviser before taking any action as appropriate. The Lending People Limited (FSP240365) is a licensed financial advice provider and can provide advice on some types of personal loans, insurance. Find out more about The Lending People and how we may be able to help you.

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¹All approvals are subject to responsible lending inquiries. If you sign your loan contracts before 3:00 pm on a weekday, you will receive the funds on the same day. While bank processing times differ, funds usually show up in your account by early evening.

²Annual Interest Rate (AIR) and Annual Percentage Rate (APR): Unsecured interest rates range from 13.90% p.a. to 23.90% p.a.

³Minimum and Maximum Repayment Terms: Repayment terms range from 1 year to 5 years.

⁴Fees: Where Lending People is the creditor, we charge a $174 establishment fee. For a limited time, until 31st March 2024, this establishment fee is waived. Lending People does not charge a monthly fee or early repayment fee. Where another provider is the creditor, provider-specific establishment fees, monthly fees, and early repayment fees may apply.

⁵Terms and Conditions: Our services are provided in accordance with our Application Terms & Conditions.

Representative Example of the Total Cost of a Loan: If you borrow $10,000 over a repayment term of 36 months at an AIR of 14.95% p.a., your total repayments will be $12,631.60 (made up of $10,000 principal, a $174 establishment fee, and interest charges of $2,457.60). This example is based on amortised scheduled weekly repayments with a fixed interest rate for the term of the loan.

© The Lending People Limited Trading as Lending People (FSP240365) holds a license issued by the Financial Markets Authority (FMA) to provide financial advice services. Click here to view our Disclosure Statement.