In today's financial landscape, securing a personal loan can be challenging, especially if you have a less-than-desirable credit score. However, the good news is that there are options available for individuals with bad credit who need financial assistance. Whether you're looking for unsecured or secured loans for bad credit, here at Instant Finance, we've got you covered.

Secured Loans for Bad Credit

What are secured loans for bad credit?

Secured loans for bad credit are loans that require collateral. Collaterals are your possessions such as vehicles, chattels, or your home (i.e. your ‘security’). If you fail to meet the conditions of your contract, that security could be repossessed by the loan provider and sold in order to recover the debt. At Instant Finance, however, we do everything in our power to avoid this from happening by working with you whenever you’re faced with financial difficulty.

Secured loans include:

  • Credit sales (aka hire purchase) – buy now, pay later agreements where the item/s purchased is the security.
  • Personal cash loans – big-ticket items like cars, motorbikes, and home theatre systems can be used to secure personal loans depending on the amount.
  • Mortgages – the home itself secures the mortgage loan.

What are the advantages of secure loans for bad credit?

  • Secured loans for bad credit typically have lower interest rates because there is less risk to the loan provider.
  • You can often borrow more money with a secured loan in comparison to an unsecured personal loan if you have bad credit.
  • Secured loans like mortgages and home equity loans sometimes allow for tax deductions on the interest paid on the loan every year.

What are the disadvantages of a secured loan?

  • If you fail to make the repayments on secure loans for bad credit, whatever has been listed as security could be at risk. For example, if you put up your car as collateral and you fail to make payments, the car may be taken and sold to repay the amount owing, as well as the charges incurred from repossession and notification.
  • Secured loans for bad credit can have variable interest rates, meaning you could be paying more than you first thought if they go up.
  • Repayment periods for secure loans for bad credit are often longer.

Keen to learn more about Bad Credit scores and bad credit personal loans? Read our blog on bad credit personal loans for more information.

Unsecured loans

What are unsecured loans for bad credit?

As the name suggests, unsecured loans for bad credit do not put any of your possessions at risk of repossession. Rather than listing your car as security, unsecured bad credit loans in NZ are approved based on your ability to repay the loan. When applying for quick, unsecured loans with bad credit, be prepared to provide information about your salary, savings, employment status and credit history.

Unsecured personal loans include:

  • Student loans – taken out to pay for higher education courses and costs like textbooks.
  • Credit cards – just your average VISA, MasterCard, American Express etc.
  • Personal loans – smaller personal cash loans often don’t require security.
  • Payday loans – cash advances and short-term loans linked to the borrower’s payday.

What are the advantages of unsecured loans for bad credit?

  • Even if you don’t own any valuable assets to help secure a loan, you may still be eligible for unsecured bad credit loans in NZ.
  • Your personal items aren’t at risk of being repossessed with an unsecured loan.
  • It often takes far less time to get approved for unsecured loans for bad credit than for secured loans.

What are the disadvantages of unsecured loans for bad credit?

  • Due to the higher risk for loan providers, unsecured bad credit loans in NZ often come with higher interest rates.
  • Unsecured loans often have a lower limit than you can borrow due to their higher risk.

Interested in reading more about Bad Credit scores and bad credit personal loans? Read our blog on bad credit personal loans for more information.

Ready to apply for a secured or unsecured loan?

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Other loans

Instant Finance offers two other types of loans for specific purchases.

MyHome loans

MyHome logo

MyHome provides top-quality brand-name homeware through the network of Instant Finance branches. They offer no deposit finance and a range of products at competitive prices and free delivery.

Products include: washing machines, TVs, lounge suites, dining suites, fridges/freezers, furniture, mobile phones, computers, and more.

Brand names include: Samsung, Apple, Simpson, Panasonic, Mitsubishi, Phillips, and more.

Have a look at MyHome's range of products.

Easy Driver loans

Easy Driver logo

Easy Driver offers you the choice of hassle-free motoring with simple vehicle financing options. There’s a large range of quality second-hand vehicles available at the car yard today! They offer vehicle loans with no deposit finance available and different terms to suit your budget.

Check out Easy Driver's vehicle range.

Quick, unsecured loans for bad credit can offer a solution to individuals who require money but have an imperfect credit history. On the other hand, if you want to take out a secured loan but have a poor credit score, you will need to use your assets as collateral. Therefore, it’s crucial to consider both the advantages and disadvantages of both loan options before making an informed decision.

Regardless of what type of personal loan you opt for, remember it’s the ability to pay off that loan that matters most. Defaulting on any loan is likely to affect your credit score/rating, making it difficult to obtain any more credit in the future.

A trustworthy lender won’t let you borrow more than you’re able to manage, and they’ll help you by stating in clear terms what’s required to service the loan. Instant Finance takes pride in having offered great loans and helpful customer service for over 50 years.

For more information on our loan options, visit our FAQ.