Nickson's top tips for not getting stung by your loan

Sponsored 29/06/2020

Hey it’s tough times right now 

It’s easy to get stung when it comes to getting a loan. Managing finances can be pretty tough, especially when we didn’t get taught this stuff at school! 

We’re tired of hearing all of the horror stories surrounding finance and loans so we’ve teamed up with the Commerce Commission to share some helpful insights & tips to keep you out of hot water.

Top tip - Whatever you do, always ask questions! Lenders MUST always provide you with ALL the details, so don’t be shy about asking.

When looking at purchasing a new car, you’ll shop around to find the right wheels, so make sure you shop around to find the right loan too! Remember, you don’t have to get a loan from the guy selling the car to you. 

Hit up those lenders, and compare things like annual interest rates, fees, loan terms, repayments and the total amount you’ll be paying back. Don’t ever sign without knowing all the costs.

If a family member or friend asks you to be a guarantor, you aren’t guaranteeing they are a good person... It means you are taking responsibility to cover repayments of their loan if they aren’t able to pay. 

Think hard about agreeing to that, do you trust the person and do you have enough funds as a backup in case things do go wrong and they can’t make these payments?

Insurance is another tricky one and this is often where people get stung. We all want to protect ourselves and our things, but sometimes we are sold insurance that we don’t necessarily need. 

Look out for things like GAP insurance, mechanical warranty & payment protection. You may not need that stuff. Ask if you have to buy it, and if you don’t - make sure you understand when it will cover you and when it won’t.  Don’t pay for stuff you don’t need.

Remember, knowledge is power. Whatever you do, make sure you understand the ins and outs of the deals you are making so that there’s no painful sting in the tail of that loan.

This article was created by Mai FM in association with the New Zealand Commerce Commission. If you’d like to find out more or have any questions don’t be shy to reach out to the Citizens Advice Bureau or your local Community Law Centre.