Instant Finance vs MTF: two branch-based lenders

Comparing Instant Finance with MTF is a fair match on the surface: both operate from branches, both fund cars, and both belong to the same dispute scheme. The useful comparison is below the surface, in loan sizes, terms and the way fees are charged. We are a guide, not a lender or broker, so we cannot tell you who will say yes. We can show what each says about itself.

Where the two differ most

Instant Finance sells itself as a personal lender for everyday needs, and a car loan is one of a long list: online loans, cash loans, vehicle loans, travel, home, debt consolidation, dental, student and medical. MTF is more narrowly about vehicles and assets, with business, personal and mortgage services added around that.

The practical result is that an MTF vehicle loan is designed around the asset, and an Instant Finance car loan sits inside a general personal lending product that can be secured or unsecured.

What Instant Finance publishes

Its rates and fees page states:

• interest rates from 9.95% to 29.95% a year, set for you personally and fixed for the life of the loan
• amounts from $500 to $50,000 and terms from 3 months to 7 years
• an establishment fee of $100 or $220 depending on the new money borrowed, plus an ID check fee of $2.55 or $7.70, which can be added to the loan
• an administration fee of $3 on each repayment
• an $8.05 security registration fee on secured loans
• a $25 fee to pay off early, with unused interest and admin fees rebated

It gives an example: $10,000 over three years, paid weekly, costs $12,308.40 in total at 9.95%, $14,079.00 at 19.95% and $15,996.24 at 29.95%. Those totals include its fees.

Its about-us page says it has operated since 1971, has 25 branches, is a member of the Financial Services Federation, and participates in the IFSO Scheme. It also says it looks at your whole situation and not only a credit score. That is a description of its approach, not a promise about any applicant.

What MTF publishes

Its car loan page says you can borrow $2,000 to $500,000 if MTF is confident you can manage the repayments. Its rates and fees page gives secured rates of 10.55% to 22.55% and unsecured rates of 14.00% to 24.00%, both fixed. For secured loans the fee list shows an establishment fee up to $380, an agent fee up to $250 when an MTF agent refers you, a $7.54 monthly admin fee and a $10.35 PPSR fee. Penalty interest is 5% a year on top of the contract rate.

MTF also says exploring your options and starting an application has no impact on your credit score, and that it can usually tell you the same day how much you are approved for, subject to responsible lending checks.

The comparison table

Fees charged per repayment

Instant Finance charges $3 on each repayment. If you pay weekly over three years that is 156 payments, so $468 of administration fees. Pay monthly and it is 36 payments, so $108. MTF charges its admin fee monthly. This is why the repayment frequency you choose is part of the price, not only a convenience. Ask each lender to quote the same frequency, and ask for the total.

Short term or long term

Instant Finance’s range from 3 months to 7 years means you could pick almost any term. Longer terms lower the repayment and raise the total interest. Consider an $8,000 loan at 18% a year, ignoring fees.

• 24 months: about $399 a month, about $9,585 in all, so about $1,585 in interest.
• 60 months: about $203 a month, about $12,189 in all, so about $4,189 in interest.

These are made-up numbers for illustration, not offers from either lender. Stretching the loan to lower the payment costs about $2,600 more in this example. The cost of a longer term is the same at every lender; what differs is how much you can borrow and at what rate. Our best car loan page covers choosing a term.

What the law gives you with either

Both lenders are bound by the Credit Contracts and Consumer Finance Act. The parts that speak most to a branch lender are:

• Responsible lending. The lender must ask enough questions to be satisfied that the loan suits your needs and that you can afford it. Expect to be asked about your income and your spending.
• Disclosure before you commit. You must receive a written statement of the rate, fees and payments before you are bound, and you should read it away from the counter.
• Hardship. If something unexpected hits your income, you can ask the lender to change your repayments. The lender has to consider it.
• A scheme to turn to. Both name IFSO. It is free to use once the lender has had its chance to respond.

Face-to-face lending does not change these rights, but it does change the pressure. A person across the desk is easier to agree with. Take the paperwork home.

Reading each lender’s own words on credit

Both lenders say something about how they look at an application, and neither says enough to predict an outcome. Instant Finance writes that it looks at your whole situation, not just a credit score, and that it will only lend what you can afford. MTF writes that its rate depends on information from credit bureaus and other third parties, and on your history with MTF if you are a recent customer. Those are descriptions of method. They are not promises, and both lenders still run responsible lending checks. If you have a mark on your credit file, ask each lender how it would treat it before you apply, and keep the answer.

How to choose

1. Set the amount and term first. If you only need a small loan, check the minimums. MTF’s published range starts at $2,000; Instant Finance’s starts at $500.
2. Request an offer from each on identical terms.
3. Compare the totals, then the fee structure. Your payment day and frequency matter.
4. Look at the exit. Ask for a settlement quote.
5. Check proximity if it matters. A branch near you is only useful if you plan to use it.
6. Add a third quote. A bank or another finance company shows whether either offer is out of line. See bank vs finance company car loan.

Steps to take

1. Work out the repayment you can carry with room to spare.
2. Ask both for written offers, including rate, every fee and total repayable.
3. Ask whether the loan will be secured on the car.
4. Check both on the Financial Service Providers Register.
5. Read the disclosure at home.
6. If you want help comparing lenders, the /check form passes your details to a broker partner, who compares lenders for you and calls you back.

Checklist

• Offers on the same loan from both.
• All fees listed, including per-repayment charges.
• Repayment frequency matched.
• Secured or unsecured confirmed.
• Early repayment figure in hand.
• Complaints scheme known.

Red flags

• A “from” rate and no personal rate.
• Fees you first see on the final contract.
• Insurance added without its own price.
• Being told a loan is certain before the lender has looked at your details.
• Being pushed to sign in the branch.

If repayments get hard, tell the lender early and call MoneyTalks on 0800 345 123.

Sources

• Instant Finance: rates and fees
• Instant Finance: about us
• Instant Finance: complaints
• MTF: interest rates and fees
• MTF: car loans
• MTF: contact and complaints
• Consumer Protection: what lenders must do
• Insurance and Financial Services Ombudsman