How the Non-Bank Lending Process Works in New Zealand
In New Zealand any institution can offer banking processes like investment services, money transfer services and even loan and credit facilities for borrowers and investors. However, it may only use the word “bank” in its name when it is registered with the Reserve Bank of New Zealand. As a result there are around 400 companies in the country which offer a wide range of financial services to customers. These institutions are called non-bank financial institutions.
Non-bank financial institutions in New Zealand have strongly expanded over the past few years and they account for more than half of the consumer credit in the country. These institutions account for around 10 percent of domestically sourced credit provisions, over 15 percent of total commercial property lending and a significant share of development lending. The most popular non-bank financing loans in New Zealand are often used for vehicle purchases.
Although the interest rates and rules for borrowing money from non-bank financial institutions vary from company to company, certain patterns are followed. The interest rates for car loans are generally higher than home loans no matter which part of the country you are in. Regardless of the interest rates, if you are able to sanction a loan of a shorter loan term, you will end up paying lesser total interest than you would have otherwise. If you are in Kapiti and need car finance there are many non-bank providers for those with a bad credit rating.
Certain non-bank financial institutions, which offer vehicle finance in Kapiti will consider your credit history to decide the rate of interest and the amount they can sanction. However, they do offer to lend money to people who do not have a good credit rating. Having a steady source of income can be a major contributing factor when you are looking to borrow money from non-bank sources.
Although non-bank financial institutions do not come under the regulations of the Reserve Bank of New Zealand, they do have to follow certain financial laws, such as the Anti-Money Laundering and Countering Financing of Terrorism Act of 2009. These laws are in place to make New Zealand a safer place to do business in and there would be more security measures that customers may face when approaching non-bank financial institutions.
The process that you would need to go through when approaching a non-bank financial institution for a car loan is similar throughout most companies. The checklist given below is what would be needed by most non-bank financial institutions when you approach them for a car loan:
> You would require a proof of identification (like a passport),
> A driver's license
> Verification of address like utility bills, insurance documents
> A budget of your regular incomes and expenditures
> Your payslip
> Bank statements
You will need to carry original copies of the documents mentioned above. If you are not able to furnish original copies, you will need to have the photocopies verified by authorised people such as the Justice of the Peace, a notary public, lawyer or a chartered accountant and even have a certificate of identification. Ensure that none of the people who verify your documents are related to you in any way, so that the financial institution can be assured of a fair procedure. Once you discuss your borrowing requirements and finalise the details, you would have to have your purchase approved by the company and sign a loan agreement.
Oxford Finance provides car loans to customers throughout the Wellington and Kapiti regions. They are a well-established non-bank lender who can help you manage your bad credit rating and get on the road!
Visit the Oxford Finance website on www.oxfordfinance.co.nz
to find out how the experienced car financing team at Oxford Finance can help you.
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