Bad credit loans NZ: what they cost
See what a loan costs with defaults on your credit file, then have a licensed broker check which lenders would consider you.
$49 a week
$7,592 paid back in total
$5,000 over 3 years at 29.95% p.a., the top of Instant Finance's range, no fees added, checked 21 Oct 2026. Fees and conditions are below.
Can I get a loan with bad credit in NZ?
Some finance companies, credit unions and brokers will look at your application with defaults or missed payments on your file. Expect a higher rate than a bank. Every one still checks your income, your spending and whether you can repay.
- Instant Finance says a default, missed payment or judgment "isn't an automatic no", and lends $500 to $50,000.
- Unity checks every applicant's credit, and a low score doesn't necessarily mean a decline.
- Nectar doesn't lend if you have serious bad debts or payment defaults.
- Unity, Max Loans and SeedCash don't lend while you're bankrupt or in a No Asset Procedure.
Every consumer lender must make reasonable inquiries into affordability before lending (Credit Contracts and Consumer Finance Act 2003, s 9C); the FMA has regulated consumer lenders since 1 July 2026. Each provider's page, checked 21 Oct 2026.
What would a $5,000 loan cost me?
Put in the amount, the term and the rate a lender quotes you, and you'll see the repayment and the total side by side. It starts at 29.95%, because a file with defaults usually gets rates near the top of the range.
Nothing you type leaves your screen unless you send the enquiry form.
Bad credit loan rates and fees in NZ, October 2026
Most lenders and brokers top out between 28.99% and 29.99% a year, with set-up fees from $0 to $450. With defaults on your file, expect a rate near the top. The low end, like Nectar's 7.95%, goes to strong credit with no defaults.
Compare Loans doesn't list every lender, doesn't list lenders charging 50% or more, and none of these pays to appear.
| Lender | Rate (p.a.) | Fee | Each week | Paid back in total |
|---|---|---|---|---|
| First Credit Union10.95%–18.00% · $0 fee | 10.95%–18.00% | $0 | $42 | $6,479 |
| Unity12.90%–22.90% · $200 fee | 12.90%–22.90% | $200 | $46 | $7,200 |
| Max Loans (broker)8.99%–29.99% · $200 fee | 8.99%–29.99% | $200 | $51 | $7,899 |
| Finance Now8.25%–29.95% · $215 fee | 8.25%–29.95% | $215 | $51 | $7,918 |
| Instant Finance9.95%–29.95% · $100–$220 fee | 9.95%–29.95% | $100–$220 | $51 | $7,926 |
| Nectar7.95%–29.95% · $230 fee | 7.95%–29.95% | $230 | $51 | $7,941 |
| Gem by Latitude9.99%–29.99% · $240 fee | 9.99%–29.99% | $240 | $51 | $7,960 |
| Better Finance (broker)9.95%–29.95% · $375 fee | 9.95%–29.95% | $375 | $52 | $8,161 |
Each week and total: $5,000 over 3 years at the top of each advertised range, with the highest set-up fee added. Rates from each lender's and broker's own page, checked 21 Oct 2026.
See which lenders would consider meHow much do fees add to a bad credit loan?
Fees can add more than you'd expect on a small loan. On $5,000 at 29.95% over 3 years, Moola's top fees of $450 and $1,500 add $2,961, so you'd pay back $10,552 instead of $7,592.
A broker fee alone can reach 30% of what you borrow. Ask any lender or broker for the total with every fee in, before you sign.
| $5,000 over 3 years | Each week | Paid back in total |
|---|---|---|
| 9.95%, no fees | $37 | $5,788 |
| 19.95%, no fees | $43 | $6,654 |
| 29.95%, no fees | $49 | $7,592 |
| 29.95% plus a $450 set-up fee | $53 | $8,275 |
| 29.95% plus $450 set-up and $1,500 broker fees | $68 | $10,552 |
| 49.95%, no fees | $62 | $9,669 |
Estimate only, not a quote or an approval. Your rate depends on your credit and the lender. Rates checked 21 Oct 2026.
See which lenders would consider meWhat do lenders look at if my file has defaults?
How many defaults you have and whether they're paid, whether you're bankrupt or in a No Asset Procedure, your income and time in work, where you live, and any security you can offer. Each lender sets its own limits:
- Max Loans (broker): unsecured, no more than one paid default to a bank or finance company and two small unpaid defaults elsewhere.
- SeedCash: no more than five unpaid defaults, at least $300 a week and 3 months in work.
- Instant Finance: a default, missed payment or judgment is not an automatic decline, and benefit income is accepted.
- Unity: weighs your credit history with your income and ability to repay, and accepts self-employed applicants.
- Nectar: no serious bad debts or payment defaults, and about $350 a week or more after tax.
- Max Loans, SeedCash and Unity: not while you're bankrupt or in a No Asset Procedure.
Offering your car as security lowers the rate. Gem charges 8.99%–28.99% secured against 9.99%–29.99% unsecured, and Unity 9.90%–19.90% against 12.90%–22.90%. You could lose the car if you stop paying.
Each provider's page, checked 21 Oct 2026. Secured rates are for borrowers who meet each lender's criteria.
What do default, judgment and credit score mean?
- A default is a payment of $125 or more that's at least 30 days overdue, after the lender has told you, asked for payment and tried to recover it.
- A judgment is a court order to pay a debt. It can stay listed for five years.
- A credit score is a rating of how likely you are to default, calculated by a credit reporter from your file.
New Zealand has three credit reporters: Centrix, Equifax and Experian, the former illion. Each holds a different file and gives a different score, because lenders don't all report to the same one.
Credit Reporting Privacy Code 2020, clause 4 and Schedule 1, in force 1 May 2026.
How long do defaults stay on my credit file?
Five years from the date of default, paid or not. Paying it changes its status to paid, which lenders like to see, and it still drops off on the same date. The "seven years" rule you may have heard of belongs to other countries.
| On your credit file | How long it stays |
|---|---|
| Default on your own loan | 5 years from the date of default |
| Judgment | 5 years from the date of judgment |
| Credit application (each enquiry a lender makes) | 5 years from the date of application |
| Repayment history | 2 years from the month after each due date |
| Debt Repayment Order | 5 years from the date of the order |
| Single bankruptcy or No Asset Procedure | 4 years from the date of discharge |
| More than one bankruptcy or NAP | Indefinitely |
Credit Reporting Privacy Code 2020, Schedule 1, in force 1 May 2026.
When does it leave my file?
Use the date of default on your credit report, not the date the debt started.
Leaves your file by March 2028.
A default dated March 2023 must come off by March 2028, five years from the date of default, whether it's paid or not.
A default from March 2023 is past the five-year limit. If it still shows, ask the credit reporter to remove it. The correction is free.
How do I get my free credit report?
Ask all three credit reporters, Centrix, Equifax and Experian, because each holds different information. It's free unless you want it within 3 working days, when a reporter can charge up to $10. Fixing a mistake is always free.
- Choose the free option on each reporter's website and prove who you are.
- Check every default, judgment and enquiry against your own records.
- Dispute anything wrong with that reporter. It must tell you within 20 working days whether it will fix it.
A corrected item goes to anyone who recently got your report. A default that was right and later paid stays as paid until its five-year date.
Credit Reporting Privacy Code 2020, clause 6 and summary of rights.
How can I improve my chances before applying?
Six things help, and none of them needs a new loan. Waiting works too: a default dated March 2023 leaves your file by March 2028, and the drop-off checker shows the date for yours.
- 1
Read all three free credit reports. Each holds a different file, and fixing an error costs nothing.
- 2
Settle or arrange each unpaid default. Max Loans and SeedCash both treat paid defaults more kindly than unpaid ones.
- 3
Make one application, not five. Each one stays on your file for five years, and several close together look like a string of declines.
- 4
Ask for a quote with a soft credit check, which doesn't affect your score.
- 5
Have three months of bank statements ready. Instant Finance checks your income and spending from them.
- 6
Offer security if you own a car. Gem's secured rates start 1 point lower and Unity's 3 points lower, but the car is at risk if you stop paying.
Credit applications stay on file for five years under the Credit Reporting Privacy Code 2020, Schedule 1. Gem and Unity rates checked 21 Oct 2026.
Can any lender promise to approve me?
No New Zealand lender can promise approval. Every lender has to look into what you can afford first. The advertising rules ban any advertisement that says or implies the lender:
- will not look into your circumstances
- will ignore a poor credit history or a bankruptcy
- has already approved a loan before the lender's checks are complete.
An advertisement that mentions approval in minutes or hours must also say that responsible lending checks apply. So an offer that promises a yes before any check is a warning sign. Check the lender on the Financial Service Providers Register at fsp-register.companiesoffice.govt.nz.
CCCFA s 9C; Credit Contracts and Consumer Finance Regulations 2004, reg 4AAAT. Consumer lenders have needed an FMA licence since 1 July 2026, and lenders certified before that date were deemed licensed.
What limits apply to high-cost loans in NZ?
A loan at 50% a year or more counts as high-cost, and four rules limit what the lender can charge and who it can lend to:
- Interest and fees can't go over 0.8% of the amount borrowed per day.
- Total interest and fees can't go over the amount you first borrowed. On a $500 loan, that's $500 at most.
- A lender can't give you a high-cost loan if you've had two or more in the last 90 days.
- No compound interest.
None of the lenders here charges that much. SMB comes closest at 49.95%, where $5,000 over 3 years costs $4,669 in interest and $9,669 in total, before SMB's $240 fee.
Credit Contracts and Consumer Finance Act: s 45C (high-cost loan), s 45H (0.8% a day), s 45E (100% in total), s 45G (repeat loans), s 45I (compound interest).
Where can I get free help or a no-interest loan?
If repayments are already hard to meet, MoneyTalks is free and confidential: 0800 345 123.
Try these before any bad credit loan:
- MoneyTalks, run by FinCap, connects you with a free financial mentor by phone (0800 345 123), free text (4029), email or live chat. A mentor builds a budget with you and deals with creditors, and it doesn't go on your credit file.
- Good Loans from Good Shepherd NZ lend for essentials with no interest or fees, up to $7,000 for a car and $15,000 in total, if your household income is under their guide ($65,000 a year for a single person). Call 0800 466 370.
- Ngā Tāngata Microfinance lends up to $5,000 with no interest or fees to pay off high-interest loans or buy essentials, if you hold a Community Services Card.
- Work and Income covers urgent costs like whiteware, bond or power bills with a grant or an advance. Call 0800 559 009.
- Your current lender has to consider a hardship application if illness, job loss or a relationship ending hits your repayments, and can't charge you for it.
Why use a broker if my credit file has marks?
A broker knows each lender's limits, so your file goes to one lender whose rules it meets instead of to several in turn. Each full application stays on your file for five years.
A broker can charge a fee, so ask first. Moola's goes up to $1,500 on a funded loan, Better Finance's up to $995, and Max Loans' example includes a $495 adviser fee.
Every licensed broker must give you a disclosure statement setting out its fees and the commission lenders pay it. Compare Loans does not lend money and does not give financial advice, and passes your enquiry to a licensed broker only when you send the enquiry form. The lender still runs its own credit and affordability checks.
What about a car or home loan with defaults?
- Buying a car with defaults on file: see car finance with a credit file that has defaults.
- A home loan with past defaults or a discharged insolvency: see home loans.
- Combining several debts into one loan: see debt consolidation loans.
- A credit file without defaults: see personal loan rates.
- Extra repayments or a full schedule: see the loan calculator.
What else do people ask about bad credit loans?
What is a bad credit score in NZ?
There's no single cut-off, because Centrix, Equifax and Experian each calculate a different score from a different file. Scores run from 0 to 1,000, and higher is better, according to Community Law. Lenders look past the number anyway, at how many defaults you have, whether they're paid, recent enquiries and your income.
Will getting a quote affect my credit file?
Not if the quote uses a soft credit check. A full application records a credit check on your file for five years. Nectar and Better Finance both start with a soft check, and the lender runs a full one when you go ahead.
Can I get a loan if I'm on a benefit?
Some lenders will consider it, after the same affordability check as anyone else. Instant Finance accepts applications from people on a benefit. Before you borrow, ask Work and Income about a Special Needs Grant or an Advance Payment of Benefit on 0800 559 009. Good Loans and Ngā Tāngata Microfinance charge no interest, though Good Loans doesn't lend to people on Single Jobseeker Support.
Will a guarantor help me get a loan?
It can, because the lender then has a second person to recover the debt from. Your guarantor takes on the whole debt if you stop paying, and a default listed against them stays on their file for five years. They should get independent advice before signing.
I need a few hundred dollars this week. What are my options?
Call Work and Income first, on 0800 559 009. A Special Needs Grant isn't a loan, and a Recoverable Assistance Payment carries no interest. A MoneyTalks financial mentor (0800 345 123, free text 4029) can also contact your creditors to buy you time. Good Loans take too long for urgent needs.
Can I get car finance or a home loan with defaults?
Some lenders will consider it, usually with security and at a higher rate. A loan secured on the car costs less: Gem charges 8.99%–28.99% secured against 9.99%–29.99% unsecured, for borrowers who meet its criteria. See car finance and home loans.
Is it worth paying off an old default?
Yes, in most cases. Paying it changes its status to paid, and lenders such as Max Loans and SeedCash treat a paid default more kindly than an unpaid one. It still stays on your file until five years from its date. A MoneyTalks financial mentor (0800 345 123) can check whether the debt is still owed before you pay.
How soon can I apply again after being declined?
Wait until the reason for the decline has changed, such as a corrected error, a paid default or a higher income. Each new application stays on your file for five years. Ask the lender why it said no, and read your free reports from Centrix, Equifax and Experian first.
Can a broker see which lenders would consider me?
A licensed broker tells you plainly whether any lender on their panel is likely to consider you, before any lender runs a full credit check. Each lender then runs its own credit and affordability checks. The enquiry asks how much you need, your region and when you would like the money.
Compare Loans refers you to a licensed broker and is paid a referral fee by the broker. This is not a loan application. How Compare Loans makes money