The pros and cons of non – bank lenders

The big banks are a great source of lending, whether you’re buying a house, developing or buying a car. They’re long-established, they have deep pockets, branches all over New Zealand and they advertise on TV – they’re a known quantity. That can make them feel like the only option when you want to borrow.

Getting turned down by your bank can be a real body blow. But you don’t need to give up just because the banks aren’t in the mood to approve your particular type of loan. It’s important to understand that banks have strict criteria for lending and the people working there are often bound tightly by the bank’s own calculators. Even if your project or application has a lot of merit, if it falls down in one single area, it may be a case of Computer Says No.

That’s the point at which you should consider a non-bank lender. Non-bank lenders don’t hold a banking licence, but still need to operate under the Reserve Bank’s regulations. When the banks say no, non-bank lenders can often say yes. Around 2% of New Zealand’s home loan market is now non-bank lending.



  • Often have the lowest interest rates
  • Established reputation
  • Low upfront fees
  • Easy access on many platforms
  • Lending sweeteners like cash back
  • Unlikely to collapse
  • Your loan will not be onsold

Non-bank lenders

  • Increasingly competitive interest rates
  • Solutions for borrowers turned down by banks, eg low deposit or poor credit
  • More flexibility to lend to unusual projects and situations
  • Specialists who may understand your goals better than the bank
  • Personalised customer service



  • Strict and often inflexible borrowing criteria Customer service can be impersonal
  • Will try to upsell you on other products

Non-bank lenders

  • Less likely to offer cash back
  • Unlikely to be bailed out if they’re in trouble
  • Less perceived status and safety
  • Your loan may be onsold

Here at Loan Market, we have a wealth of experience with non-bank lenders. We can work with you to figure out which lender is most likely to smile on your application, which will suit your circumstances and which will give you the best rates.

Our first port of call is always the banks, because they almost always offer the lower rates. But if the banks say no, we can help you navigate the non-bank space with ease.