A guide to borrowing money

Choosing the right kind of borrowing

Take a moment to think about what will work best for you now and in the long term.

Some questions you might ask yourself before starting the borrowing process:

• What do I need the money for?
• Is this short‑term or long‑term?
• Could I save for some or all of it instead?
• What repayments will comfortably fit my budget?

If borrowing is the right step, comparing your options can make a real difference. Choosing the right product and interest rate could save you hundreds or even thousands over time.

At Kiwibank, we focus on clear choices, fair value and flexibility that fits real Kiwi lives. We’ll help you understand your options, so you stay in control and pay off debt in a way that works for you.

Compare your borrowing options

Overdrafts

Often used for: Covering short-term cash flow gaps or unexpected expenses.

An overdraft can act as a short‑term safety net, usually from amounts starting at $100. It can help cover timing gaps, like when a bill is due before payday, or unexpected costs that come up.

Overdrafts are generally best used as a backup rather than something to rely on long term.

Credit cards

Often used for: Everyday spending, unexpected expenses, larger purchases or managing costs over time.

A credit card can be a convenient way to manage everyday spending, cover an unexpected expense or spread the cost of a larger purchase over time.

You'll need to make regular repayments each month. Paying off the balance in full where possible, or making more than the minimum repayment, can help reduce the amount of interest you pay over time.

Depending on how much you want to borrow and how quickly you plan to repay it, a credit card may be an alternative to a personal or vehicle loan. If you're using a credit card for a larger purchase, setting a repayment goal can help you pay off the balance sooner.

You may be able to reduce interest on an existing credit card by using a balance transfer. This is where you move your balance from another bank credit card or store card to a Kiwibank credit card, giving you six months at a lower interest rate.

Kiwibank offers a range of credit cards, from low-rate everyday options to cards with travel-related benefits. Compare our credit cards to see which may be right for you.

Why I think this works

Home loan top ups

Often used for: Funding larger expenses such as renovations, a vehicle or other significant purchases.

If you’ve built up some equity in your home, you might be able to borrow more with a home loan top up, your home loan to pay for things like renovations or a new car.

Many people choose to set the extra amount up as a separate loan portion with a shorter term. This can potentially help reduce how much interest you pay overall compared with spreading the cost over the full home loan term.

Looking at home loan rates and fees, and using our home loan borrow more calculator, can help you understand how much extra interest you could end up paying.

Hire purchase & store credit

Often used for: Buying household items and spreading the cost over time, including through interest-free offers.

Furniture, appliance and department stores often promote "interest free" offers. These can work well if you can pay the full amount off within the interest free period.

If there's still a balance when that period ends, higher interest rates and extra charges can apply. Making regular repayments throughout the term can help ensure there is nothing left to pay when the interest free period ends.

It's also worth checking for fees and conditions before signing up. Setting up a direct debit or an automatic payment can help you keep on top of hire purchase repayments.

What lenders look for

When you apply to borrow, lenders will look at how manageable repayments are likely to be for you. This often includes:

• your income
• how consistently your bills are paid
• whether you save money
• whether your wages are regularly paid into your account
• any existing debt
• your credit rating.

Understanding this ahead of time can help you feel more prepared and confident.

Moving forward with less debt

Paying off your debt can free up options and give you more flexibility over time.

A realistic budget can help you decide on repayments that fit your life. Setting up automatic payments on payday can remove the mental load of remembering due dates.

Once a debt is cleared, some people find it helpful to redirect that money into savings. Building an emergency fund can reduce the need to rely on borrowing when something unexpected happens. From there, you can start working towards short, medium and longer‑term goals at your own pace.

Getting support with repayments

If you're finding it hard to keep up with repayments or are experiencing financial hardship, we're here to help.

Talking to us early can open up more options. We'll work with you to understand what is going on and explore ways we may be able to help. See our support for financial difficulty page for more information.