Joe, Auckland
Having a financial safety net is crucial in a world of uncertainties. Sudden unexpected costs like medical bills, funeral bills, and car or home repairs can arise at any time, and that’s where an emergency fund comes to the rescue.
In this blog, we'll explore the concept of emergency funds, how personal loans can play a part in them, and the importance of responsible borrowing in New Zealand.
What is an Emergency Fund?
An emergency fund is money to cover unexpected expenses, such as medical emergencies, car or home repairs, funeral bills, etc, without disrupting one's financial stability.
Everyone needs an emergency fund, regardless of their income or retirement savings, to protect against the costs of unplanned events. Having at least three months' expenses in an emergency fund is recommended, although the actual amount may vary based on individual circumstances.
However, at Future Finance, we know that the increase in the cost of living and mortgages may be difficult for many people. Building an emergency fund is recommended to create a financial buffer and protection against unexpected financial disasters if you can.
How Can A Future Finance Personal Loan Help?
Personal loans can be a valuable addition to an emergency fund, providing quick access to funds for unexpected expenses. Here’s how we can help:
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Speedy Access: A Future Finance personal loan can be approved quickly, making it ideal for urgent needs. We offer personal loans that can be approved and funded within the same day, providing quick access to emergency funds when needed.
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Flexibility: Personal loans can be used for many purposes, such as medical bills, funeral costs, car or home repairs, debt consolidation, etc., making them a practical option for managing unexpected expenses. We’re here when you need us.
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Fixed Repayment Schedule: Our loans have fixed repayment schedules, which provide consistent repayments and help borrowers manage their payments effectively. Future Finance will always ensure that your payments are affordable based on your income and circumstances.
Only choose reputable lenders to avoid high costs and predatory practices when taking a personal loan. Compare costs, fees, terms, and rates, be financially prepared and only borrow what you need and can repay. With responsible borrowing, personal loans should be beneficial without hurting your credit and finances.
You must understand the loan contract, and we will always fully disclose over the phone so you know the loan T&C and what the total loan will cost you.
How Do I Apply For A Personal Loan?
Several things come into play when evaluating your need for a personal loan in New Zealand. Lenders typically focus on the following critical criteria when reviewing a loan application:
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Credit History: Lenders will assess your credit history to gauge your creditworthiness.
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Cash Flow History and Projections: Your personal and/or business cash flow history and future projections will be calculated to ensure your ability to repay the loan.
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Collateral: The availability of collateral to secure the loan will be considered for secured loans.
It's important to note that in New Zealand, lenders must adhere to responsible lending practices, which include exercising care, diligence, and skill when assessing borrowers' requirements and objectives.
Additionally, while credit scores play a significant role with some but not all lenders, lenders also consider the personal details in your loan application. At Future Finance, we don’t only use credit scores; we treat everyone as an individual based on their circumstances and consider personal factors such as stability, employment and income. It's essential to compare the offerings of different lenders to find the right loan that suits your needs and financial circumstances.
Ultimately, when considering a personal loan, it's advisable to be well-informed about your financial situation and to carefully assess the terms and conditions of the loan to ensure you are dealing with the right lender. Future Finance treats every customer and application individually, and we don’t like ticking boxes like other institutions.
Responsible Borrowing Practices
Responsible lending in New Zealand is designed to ensure borrowers' financial well-being and help them avoid high-cost lenders. Future Finance, a registered Financial Service Provider, is NZ’s only 5-star rated finance company on TrustPilot and is committed to responsible lending, assessing applications, verifying details, and only lending amounts that borrowers can comfortably repay.
The Responsible Lending Code, overseen by the Commerce Commission, outlines the principles lenders must follow to exercise care, diligence, and skill when advertising credit or finance and ensure that borrowers can meet their loan obligations.
This includes considering borrowers' financial situation, income, and repayment ability before approving a loan. These measures promote fairness, sustainability, and borrowers' financial stability, ultimately contributing to a healthy financial outcome.
How Do I Manage My Loan Effectively?
To manage a personal loan effectively, consider the following tips:
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Create a Budget: Creating a budget is essential for managing your loan. It helps you track your income and expenses, ensuring that you can make timely repayments.
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Pay On Time: Paying your loan instalments on time is crucial to maintaining a good credit rating and avoiding late fees. We make it simple by setting up a direct debit that looks after your repayments.
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Pay More Than Your Minimum: Paying more than the minimum amount due can help you pay off your loan faster and may save on interest costs.
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Consolidate Your Loans: Consolidating your loans can help simplify your repayments and, in some cases, reduce your overall interest costs to save you money.
Secure Your Financial Future with Future Finance
Talk to us, Future Finance. We’re always ready to assist and help out when unexpected arise.
Take the next step by applying for a loan with us, Future Finance, NZ’s only 5-star rated finance company on Trustpilot.
We’ve provided over 37,437 loans to Kiwis just like you, and you can see why we stand out from the rest by viewing 1300+ 5-star reviews here.
Contact our lending team today on 0800 25 10 10 for personalised, 5-star service, and let’s get you back on track.