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What is a Personal Loan?

A personal loan is a fixed term, fixed interest rate, Secured or Unsecured loan used for home renovations, holiday, funeral, purchase a new car or just help cover unexpected living expenses.

What you will learn in this Personal Loan Guide:

  • How a personal loan works
  • Benefit of a personal loan
  • What security can be used
  • Personal loan terms
  • How to apply and qualify
  • The difference between Secured and Unsecured

How does a personal loan work?

Once you have decided what you need the personal loan for you can apply and receive the funds in your bank account to pay for the home renovations, holiday, funeral, new car or cover those unexpected living expenses. You then repay the loan amount – plus interest and fees over a fixed term. Repayments can be calculated weekly, fortnightly or monthly to suit your regular income.

The Benefit

When it comes to deciding on a personal loan you need to look at the benefits as opposed to the alternatives:

Personal Loan

  • Loan term is fixed
  • Fixed interest rate
  • Repayment’s remain the same each week, fortnight or month
  • You can top up your personal loan

Credit card

  • High interest
  • No fixed term
  • No fixed repayment

As you can see taking a personal loan gives you the certainty of when you will pay the loan off, what rate, what repayments and the flexibility to increase the loan or repay the loan early.

What security can be used?

We can use the following securities:

  • Property
  • Motor vehicles – Including cars, trucks & motorbikes
  • Boats & Jetskis
  • Business assets
  • Household chattels

For some applicants we may be able to help you with an unsecured loan.

Debt Consolidation Loan Terms

The loan terms we are able to offer depends on the security offered. Below is a table detailing the terms we can offer:

SecurityMinimum TermMaximum term
Property1 Month7 Years
Motor Vehicles less than 10 years old1 Year4 Years
Motor vehicles older than 10 years1 Year3 Years
Motor vehicles older than 18 years1 Year2 Years
Boats & Jetskis1 Year3 Years
Chattels1 Year2 Years

How to apply

You can apply for a personal loan with Pioneer Finance if you are:

  • Over the age of 18; and
  • A New Zealand Citizen, Permanent Resident or in some instances on a work visa; and
  • Are employed or have a regular source of income i.e Job, Self-employed or receive a benefit

You do need to show that you have the affordability for the loan and that you are who you say you are. You can do this by providing the following:

  • Proof of Identity – i.e passport or driver’s license
  • Proof of Address – Bank statement, utilities bill or a letter from a government department
  • 3 Months bank statements

Depending on the security offered for the loan we may require further information such as rates notice, mortgage statement’s or proof of purchase.

What checks will you complete using my information?

Depending on the security offered we will do checks with the following registers:

  • Credit checks with 1 or more of the following Equifax, Centrix or Illion
  • PPSR
  • Land online
  • New Zealand transport
  • Driver check

Don’t worry if your credit check has a couple of bumps and bruises we may still be able to help you.

Personal Loan Fees and Charges

Personal loans will have various fees attached, which may include:

An establishment fee once you loan is approved and you have accepted the terms$165-$550
Ongoing monthly account fees$9
Motor Vehicle Security registration fees$8.05
Caveat registration fee$160
Early settlement fee$75
Caveat removal fee$155

Some of these fees will be charged to the loan upfront or are calculated in your weekly, fortnightly or monthly installments. Other fees can be charged at the end of the loan term such as early settlement fees or if you used your property as security a caveat removal fee can be charged.

For more details on our fees and charges go to our Interest rates and fees page in the important information section.

What’s the difference between a Secured and Unsecured loan?

When getting a personal loan it is important to look at all of the costs and fees and often using security for your loan can reduce the interest rate offered. Secured loans may take a little longer to process but are of lower risk to the lender and can reduce your overall cost.

No Security? Don’t worry you can still get an Unsecured Loan. The interest rates might be a little bit higher, but getting an unsecured personal loan can be a great alternative to a credit card. Here are some great reasons why you should look at getting an unsecured personal loan rather than a credit card:

  • Interest rate is often lower than a credit card
  • An unsecured personal loan has a set weekly, fortnightly or monthly repayment
  • It’s easy to top up the loan if you need more money

Personal Loan Repayment Example:

Amount Borrowed $10,000.00

Establishment Fee $395.00

Payment Protection Insurance $824.48

PPSR Fee $8.05

Total including fees and insurances $11,227.53

Interest Rate 16.95%pa

Monthly Account Fee $12.00

Loan Term 36 Months

35 Monthly repayments of $411.85 plus 1 final repayment of $411.41

The above is an example of a common loan request and gives you an indication of what the monthly loan repayments will be. Your establishment fee may be different depending on the security used and the time taken to process your application. We would also like to point out that the Payment Protection Insurance used in this quote is not compulsory.

Personal Loans summary

In summary, personal loans with Pioneer Finance:

  • Are fixed-term, fixed-rate secured loans
  • Are arranged online, over the phone, in one of our two branches in Wellington & Auckland or through a finance broker
  • Repayments can be made weekly, fortnightly or monthly
  • Interest rates range from 6.95%pa to 16.95%pa
  • Establishment Fees range between $165.00 – $550.00
  • Loan terms can be from one year to seven years in length. Bridging loans start from 1 month.
  • Can be used to for home renovations, holiday, funeral, purchase a new car or just help cover unexpected living expenses

Personal Loan FAQ

If you are over the age of 18 (up to the age of 21 you may require a guarantor), a permanent resident of New Zealand, earn a regular income, and can demonstrate the ability to repay the loan, you may qualify for a personal loan.

We offer loans from $1,000 to $100,000 on a personal loan in New Zealand. The amount we lend does depend on the security offered for the loan. The more security offered the better chance we will be able to lend the amount you require. We will also need to check your affordability and credit profile.

Yes. Your credit history may not be as bad as you think. Let us do the background work and we’ll take it from there. You do need to show us that you can afford to pay the debt consolidation loan, and you will need security, and may need a guarantor.

Approval time depends on some variables:

  • How much information you provide, the more information you provide the quicker we will be able to give you an answer.
  • Larger loans tend to take a little extra time
  • Loans with property involved can also take a little longer to get approved

In saying that we do endeavour to give a same day answer on all applications received.

Yes, you can make extra repayments; or you can increase your minimum repayment to help pay your loan off earlier. We do charge a small early settlement fee of $75.

Applying at multiple finance companies will no longer affect your credit rating in New Zealand. Since October 1st 2019 every credit check done by a finance company is listed as a quote with Equifax, Centrix or Illion and will only affect your credit rating should you accept the loan offer.