What a Loan Really Costs in NZ

The five costs that can sit inside a loan

1. Interest, the price of borrowing, charged on what you still owe.
2. Establishment fee, a one-off charge at the start, for assessing and setting up the loan.
3. Ongoing fees, small administration charges through the life of the loan.
4. Early repayment costs, what it costs to pay the loan off ahead of schedule.
5. Default costs, extra interest and fees that only apply if you miss payments.

A loan with a low advertised rate and heavy fees can cost more than a loan with a higher rate and light fees. The only fair comparison is the total you’ll repay.

What is an establishment fee?

An establishment fee covers the lender’s cost of assessing and setting up your loan, and it’s charged once, at the start. Across NZ non-bank lenders these commonly run from around $150 to $240, and they scale with loan size and complexity.

Crester’s establishment fees are published for every loan size, from $135 on our smallest loans up to $995 on loans over $80,000. The full table is on our loan interest rates and fees page, no ranges hidden behind “from” wording, the actual bands.

What ongoing fees do lenders charge?

Most NZ lenders charge a small recurring administration fee, commonly somewhere between a couple of dollars a repayment and a few dollars a month, which quietly adds up over a multi-year loan. When you compare loans, multiply the ongoing fee across the whole term and add it to your total.

Crester charges a $10 administration fee, plus $5 for each additional borrower, published, like everything else, on the rates and fees page.

What does repaying early cost?

Here’s one many borrowers never think to ask about: what happens if you come into money and want to clear the loan early? Some lenders charge nothing. Others charge an administration fee plus a calculated charge that compensates them for interest they won’t now earn, the calculation method is set by consumer credit regulations, not invented by the lender.

At Crester, full early repayment carries a $65 administration charge plus any prepayment charge as calculated under those regulations. Ask any lender this question before you sign, the honest ones will answer in dollars, not paragraphs.

What happens to the cost if I miss a payment?

Nobody plans to miss payments, but you should know the numbers before you need them. Late payments typically attract default interest, at Crester that’s 9.95% per annum above your normal rate, charged only on the overdue amount while it stays unpaid, and administrative default fees, such as arrears letters. All of ours are itemised on the rates and fees page.

More important than the numbers: if you hit trouble, talk to your lender early. Under New Zealand’s responsible lending rules you can apply for a hardship variation, and a decent lender would far rather adjust your repayments than watch you sink.

How do I compare two loan offers properly?

1. Get the total repayable for both. Every NZ lender must disclose your total repayments, all fees included, in the loan contract before you sign. That single number is the honest comparison.
2. Check whether the rate is fixed. A fixed rate can’t move on you mid-loan. Crester’s rates are fixed for the life of the loan.
3. Add up the ongoing fees across the whole term. $3 a fortnight over three years is over $230.
4. Ask the early repayment question. If you might clear it early, this changes which loan is cheaper.
5. Ignore “from” rates. The rate that matters is the one you’re actually offered, which depends on your circumstances, credit history and security.

Questions to ask any lender before you sign

• What is my total repayable, with every fee included?
• What is my establishment fee in dollars?
• What are the ongoing fees, and how often are they charged?
• What would it cost me to repay this loan in full, early?
• Is my rate fixed for the whole term?
• What are the default fees and default interest rate if I miss a payment?

If a lender can’t or won’t answer these plainly, that tells you something too.

Where to see our numbers

Everything above, with the actual figures: our loan interest rates and fees page publishes Crester’s full fee schedule, establishment fee bands, administration fees, early repayment charges and default fees. Our interest rates are between 9.95% and 26.98% per annum, personalised to your situation and fixed for the term.

For a feel of the weekly numbers, try the loan repayment calculator, and remember your contract will always show your exact rate, fees and total repayments before you sign anything.

Frequently Asked Questions about Loan Costs in NZ

Is the interest rate the whole cost of a loan?

No. The full cost is interest plus establishment, ongoing, and any early-repayment or default fees. Two loans with the same rate can differ by hundreds of dollars once fees are counted, which is why the total repayable figure in your contract is the number that matters.

Are loan fees regulated in New Zealand?

Yes. Under New Zealand consumer credit law, lender fees must be reasonable and every cost must be disclosed to you before you sign. If a fee only appears after you’ve signed, something has gone badly wrong, ask questions.

Why do lenders charge establishment fees?

Assessing an application properly costs real money, checking income, affordability and credit history, and setting up the loan. The establishment fee contributes to that cost. What matters for you is that it’s disclosed in dollars up front and reflected in the total repayable.

What’s the cheapest way to borrow?

The boring answer is the true one: borrow the smallest amount that solves the problem, over the shortest term you can comfortably afford, from a lender who shows you every cost before you sign. And if free help gets you there, a Work and Income advance, or a chat with a free financial mentor at MoneyTalks (0800 345 123), take that first.

Does Crester charge anything not listed on the rates page?

No. The rates and fees page is the complete schedule. If it’s not there, we don’t charge it.

Know exactly what you’d pay before you apply

Check the rates and fees, run the calculator, and if the numbers work for you, apply online in about 6 minutes. A real person will review it and give you a straight answer.