A personal loan can be a real game-changer for so many reasons – from covering unexpected expenses to funding a home renovation or consolidating debt. But in the rush to get the funds sorted, a lot of Kiwis unknowingly fall into common traps that can delay approval, cost more in the long run, or even lead to a declined application.
At East Bay Finance, we see these issues all the time. So, let’s break down the five most common mistakes people make when applying for loans—and more importantly, how you can avoid them.
1. Not Knowing Your Credit Situation
The mistake:
Many people go into a loan application completely unaware of what their credit report actually says. They assume that because they’ve paid their rent or phone bill on time, they’ll be sweet. But there might be defaults, late payments, or old debts lurking in your credit history.
Why it matters:
Lenders use your credit report to assess how risky it is to lend you money. Even a small unpaid bill from years ago can raise red flags.
How to avoid it:
Before applying, check your credit report for free through agencies like Centrix or Equifax. If there’s anything negative on there, don’t panic—at East Bay Finance, we work with lenders who offer bad credit loans, and we believe in second chances. But knowing your situation upfront helps us find the right lender for your circumstances.
2. Applying With Multiple Lenders at Once
The mistake:
You’re in a hurry, so you apply with five lenders at once thinking it’ll increase your chances. But each time you apply, it leaves a “hard enquiry” on your credit file, which can actually hurt your score.
Why it matters:
Too many hard enquiries in a short time can make it look like you’re desperate for credit, which can be a red flag for lenders.
How to avoid it:
Let a loan broker like East Bay Finance do the heavy lifting. We’ve got access to multiple lenders, so we can compare deals on your behalf without pinging your credit multiple times. One application with us gives you access to a whole network of options.
3. Borrowing More Than You Need (Or Can Afford)
The mistake:
It’s tempting to borrow a bit extra “just in case,” especially if you qualify for a higher loan amount. But bigger loans mean bigger repayments—and potentially more interest over time.
Why it matters:
If the repayments stretch your budget too thin, it could lead to missed payments, added fees, or even defaulting on the loan.
How to avoid it:
Be clear about what you need and work out a realistic repayment plan. Use our loan calculator to see what different amounts and terms would mean for your weekly budget. And if you’re unsure, talk to one of our friendly advisors—we’ll help you figure out what’s manageable and sensible.
4. Not Providing the Right Documents
The mistake:
You’ve filled in the online application, but you didn’t upload your payslips or bank statements. Or you uploaded blurry, outdated documents. Now your application is stuck in limbo while the lender chases you for more info.
Why it matters:
Incomplete applications delay the approval process—and could even lead to a decline if it looks like you’re not serious.
How to avoid it:
Make sure you’ve got all your documents ready before you apply. This usually includes:
- Valid ID (passport or driver’s licence)
- Recent payslips or proof of income
- 90 days of bank statements
At East Bay Finance, our process is 100% online, and we’ve made it as easy as possible to upload everything you need. Most approvals happen within 1–2 hours*, and same-day payouts* are possible—if we’ve got all the info upfront!
5. Not Understanding the Terms of the Loan
The mistake:
You focus only on the weekly repayment and miss the fine print—like the interest rate, loan term, fees, or early repayment penalties.
Why it matters:
The wrong loan structure could cost you thousands more than you expected. And if you can’t make extra repayments or want to pay it off early, you might get stung with fees.
How to avoid it:
Always ask questions and understand the full picture. Our team at East Bay Finance is here to explain everything clearly—no jargon, no surprises. We’ll break down the interest rates, fees, and total cost of the loan so you can make an informed choice.
Bonus Tip: Use a Loan Broker to Your Advantage
We’re not just here to match you with a lender—we’re here to make the whole process easier, faster, and less stressful. At East Bay Finance, we offer:
- Fast approval – Apply online in just 2 minutes
- Expert local advice – Our friendly team is based right here in Auckland
- Access to more lenders – Giving you more chances of approval
- Great rates – Secured loans from 9.95%*, unsecured from 11.95%*
- Loans for all credit types – Including if you’ve had a rough patch in the past
- Hassle-free process – No hoop jumping required
Whether you need $5,000 or $75,000, our goal is to find you the best deal with the least hassle.
Applying for a loan doesn’t have to be daunting—but it pays to do it right. By avoiding these common mistakes, you’ll put yourself in a much better position to get approved quickly and score a great deal.
Got questions or ready to get started?
*Subject to responsible lending checks and criteria.
