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Alternative Lending Solutions when the Bank Says No.

Getting a pre-approval from a traditional bank can be challenging if you’re unable to provide proof of income or have poor credit history. At Twine Financial Advisers, we specialize in finding alternative lending solutions to help you secure the financing you need, regardless of your situation.

Before we consider non-bank and specialist lenders, it’s essential to explore all avenues. Each bank has unique credit policies for various situations, and your Twine adviser may be able to negotiate a viable solution with a different main bank before considering the often costlier non-bank and specialist lenders.

The 5 C's of Credit

Banks refer to the 5 C’s of Credit when deciding whether to approve or decline your application. Below are examples why they may decline your application and where a non-bank lender may help instead.

Character

When banks evaluate loan applications, they starting focus is on your creditworthiness. Although credit scores aren’t as important in NZ as elsewhere in the world, if you have too many credit enquiries or a history of defaults it can lead to rejection. Non-bank lenders can help in these situations, and we can work together on a plan to rebuild your credit record, making you eligible for bank loans later down the track

Capacity

Self-employed individuals or those with seasonal employment sometimes face challenges getting approved by traditional banks. Frequent job changes or starting as a contractor in a new industry can raise concerns. Traditional banks have stricter criteria for assessing loan capacity. In contrast, non-bank lenders take a more flexible approach when evaluating your ability to service a loan. They understand unique employment circumstances and may be more willing to work with you, considering various income sources and work situations.

Capital

This is to do with your deposit and your overall wealth relative to your age. Non-banks aren’t the strongest in this category, specifically for first home buyers as they do not have the exemptions that the banks do to lend a lot in the low deposit space. However, they have varying policies to do with verifying the value of the property. Perhaps you signed on a new-build for $800,000 and now it’s worth $1,000,000. There are some non-banks that will accept the new valuation up-front, whereas the bank will always take the lower value at the time of purchase when considering how much more deposit you’ll need to pay.

Collateral

If the property has a significant amount of ‘deferred maintenance’ a non-bank with enough deposit injected would be more willing to take it on. However, banks are more flexible when it comes to small towns or regional locations.

Conditions

Non-bank lenders offer more flexibility, but this typically comes with higher interest rates. This flexibility can be a powerful tool when traditional bank loans don’t align with your unique needs.

How We Help You get a Yes

We understand that each financial situation is unique. In today’s ever-evolving financial landscape with changes to bank preferences and fluctuating interest rates, it’s important to seek professional advice. Whether you’re looking to refinance to escape your main bank’s constraints or planning to return to main bank lending after your financial affairs are in order, we’ll work together to find the right solution for you.

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Access to Specialist Lenders

We have access to a wide network of non-bank and specialist lenders in New Zealand. We can help find the right lender that suits your unique situation. While specialist lenders often charge higher interest rates due to the uniqueness of the cases they handle, our goal is to work with you to ensure you get back on track and repay your debt efficiently.