Don’t lock in pre-Christmas loans without comparing market

CANSTAR has released the 2016 Personal Loans Star Ratings Report, looking at 30 products from 10 lenders

The festive season is a high-spend time of year. CANSTAR’s research of 30 personal loan products across 10 providers has found that there is strong competition in the market, with advertised rates as low as 8.90%* for a secured personal loan and 9.99%* for an unsecured loan.

*Rates as at 1 December 2016 and may include promotional rates. As listed on

Read full Personal Loans Report

While our research found that personal loan rates, similar to credit card rates, don’t tend to be as reactive to changes in the official cash rate as, say, home loans, personal loan rates are nevertheless quite competitive at the moment.

As at 1 October 2016, we saw a 1% decrease in the minimum interest rate for secured personal loans, compared with the same month the previous year. That type of difference can make a significant difference to overall loan costs – and could come as welcome savings as you start thinking about expenses over the often costly Christmas and New Year season.

personal loans christmas

NZCU Baywide has received a 5-star award for Outstanding Value in both the secured and unsecured personal loan category. For the second year in a row, peer-to-peer lender Harmoney has received a 5-star rating for its unsecured loans for customers with an A credit rating (representing the highest credit rating tiers). TSB and the Co-operative Bank both received a 5-star rating their secured personal loans. TSB also received a 5-star rating for its unsecured loan.

Peer-to-peer platforms are relatively new to New Zealand, but increasing numbers of players are entering the market so it will be interesting to watch the industry develop over the next few years.

Compare personal loan interest rates

Check out how personal loan rates have changed from October 2015 to October 2016. There has been a considerable increase in the maximum rates for unsecured personal loans – from 28.70% to 22.96%. But, with secured personal loans, the maximum rate has remained the same.

Unsecured (%) Secured (%)
Average 16.14 11.87
Min 9.99 8.90
Max 28.70 13.95
Rates based on loan amount of $15,000 over 3 Years – Data as at 01/10/2016. Source: CANSTAR.

Unsecured (%) Secured (%)
Average 15.64 12.08
Min 9.99 9.90
Max 22.96 13.95
Rates based on loan amount of $15,000 over 3 Years – Data as at 1/10/2015. Source: CANSTAR.

… but don’t spend more than you can afford

star ratings personal loans

No matter how low personal loan interest rates are, don’t get into debt unless you have to. At this time of year, it’s tempting to spend just a bit more money than we can really afford, whether it’s for Christmas presents, a holiday or just celebrations. Case in point, credit card balances tend to peak around December. But remember, unless it was money you were going to spend anyway, you shouldn’t use rates as an excuse to splurge even more.

CANSTAR’s five-star personal loan products

CANSTAR’s annual personal loans analysis looked at 30 products from 10 lenders to determine which ones offer outstanding value for money. The five star-rated products are as follows:

Unsecured Personal Loans:

Company Product
Harmoney Unsecured Personal Loan A Credit Rating
TSB Bank Personal Loan – Unsecured
NZCU Baywide Unsecured – Orange

Secured Personal Loans:

Company Product
NZCU Baywide Secured – Orange
The Cooperative Bank Personal Loan – Secured
TSB Bank Personal Loan – Secured

Details of the products are in Canstar’s 2016 ratings report.

Read full Personal Loans Report


Share this article

Enjoyed reading this article?

Sign up to receive more news like this straight to your inbox

By subscribing you agree to the Canstar Privacy Policy.

Thanks for signing up!

Good things are coming your way.