Use our tool to learn about some of the best ways to borrow
Answer a few simple questions and we'll let you know whether to consider a credit card, loan, overdraft or mortgage for your borrowing needs.
Personal loans
A loan is where you borrow a set amount of money for an agreed amount of time. You pay back the full amount – usually in monthly instalments – plus interest. For most fixed-term loans, the amount you pay and the rate of interest is fixed at the outset and won’t change until it’s paid off.
Pro
Suitable for large purchases or consolidating existing borrowing.
You know exactly how much you need to repay each month
Con
Less suitable for smaller purchases eg less than OCU1,000
Less suitable for short-term borrowing eg less than a year
Credit cards
You can use a credit card to spend up to an agreed credit limit and pay it back later. If you owe money, you have to make at least a minimum payment – a percentage of what you owe – each month. If you don’t repay it in full each month, you’ll usually be charged interest.
Pro
Some banks offer interest-free purchase or balance transfer periods and reward programs
Flexible monthly repayments
Con
Interest can stack up over time if you only make the minimum payment each month
Overdrafts
Bank accounts with arranged overdrafts let you continue spending money from your current account when your balance falls below $0. To help you manage unexpected bills, your arranged overdraft will usually include an interest-free buffer. But once you pass that amount, you’ll be charged interest.
Pro
Some bank accounts offer interest-free buffers on their arranged overdraft.
Emergency budgeting
Con
Not good for long-term or regular borrowing
High interest rate, where interest is charged
Borrow more on your mortgage
Borrowing more on your mortgage involves taking on more lending from your current mortgage lender. Typically with a mortgage, you'll pay the loan back on a monthly basis and you'll need to make sure you can afford your repayment because it is secured against your home.Consider this option for larger purchases with repayment over a longer period, typically over $10k and 60 months.
Pro
Frees up funds for large purchases
Usually lower interest rates with longer repayment periods available
Con
Paid back over longer period therefore could pay more interest
Secured against your home, so you could lose it if you miss payments
