From 11 December 2023 some of our fees are reducing. These changes do not impact our interest rates. See full details 
As a lender, one of the things we get asked a lot is how to reduce the amount of interest someone pays. Here’s your answer!
HOW IS MY INTEREST RATE CALCULATED?
Your loan provider will always disclose your interest rate and the total amount of interest you are paying as part of your loan contract, as well as any fees relating to the loan. It’s also important to note that every loan provider has their own unique assessment criteria. That’s why you might get a “no” when you apply for a loan with one provider and a “yes” from another.
The interest rate you are offered will be calculated by taking a number of factors into consideration such as your credit history, your stability, any financial commitments you already have, your work status and any security that is offered on the loan (if applicable). Again, this will vary depending on which loan provider you’re with.
For most loans, every payment you make includes principal (the amount you borrow) and interest. The amount of interest you end up paying over the life of your loan can change depending on the term of your loan and the payments you make.
HOW DO I PAY LESS IN INTEREST?
The simplest way to pay less interest is to make extra payments on your loan so that you’re paying your loan off faster. Even an extra $10 or $20 will reduce the total interest you pay. For example, paying just an extra $10 per week over 2 years on a $3000 loan will save you $166 in interest.
If at any point you can’t make a payment on your loan, it’s really important to get in touch with your finance provider. Interest on defaulted payments, and default fees can add up quickly, and having an honest conversation can make all the difference.
Before you take a loan, it’s a really good idea to make sure you have your budget in order and that you really understand what the loan will really cost you. Sorted.org.nz has some fantastic tools available, including a debt calculator which lets you see how your repayments affect the overall interest you’ll pay. https://sorted.org.nz/tools/debt-calculator
This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact Avanti Finance or your financial adviser. Neither Avanti Finance nor any person involved in this article accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any information, representation or omission, whether negligent or otherwise, contained in this publication. References to third-party websites are provided for your convenience only. Avanti Finance accepts no responsibility for the availability or content of such websites.