Nectar vs MTF: unsecured online loan or secured vehicle loan

Nectar and MTF can both put money in your account to buy a car, but they arrive at it differently. One is built around an online form. The other is built around local offices and a network of dealers. This page compares the two on what each says about itself. We are a guide, not a lender, and we do not know who would lend to you.

What kind of loan you are comparing

The core of this comparison is security, so start there.

Nectar lists car loans among its personal loans. Its rates and terms pages describe loans as unsecured with fixed rates. In plain terms, you borrow money and spend it on a car, but the lender has no legal claim over the car itself.

MTF describes vehicle loans secured on an asset. Its car loan page says the asset you are borrowing for, or another asset you own, secures the loan, and that the asset must be worth more than $2,000 and have a serial number. MTF also lists unsecured lending, at higher published rates.

A secured loan gives the lender a fallback, which is why secured rates are generally lower. An unsecured loan leaves the car free of a claim, so the lender prices in more risk. Our page on hire purchase against a car loan explains how security shows up in different contracts.

How each describes itself

Nectar calls itself a direct New Zealand lender that combines “smart technology with human judgement”. Its application is described as taking about seven minutes, with funds aimed at the same day the contract is signed online. Nectar Trustee Limited is the legal name on its complaints page.

MTF describes local lending experts, a network of approved dealers and more than 50 offices. You can start a loan online, by phone, or in person. It was born from a dealer-run model in 1970.

Side by side

Nectar also lists a $15 dishonour fee, a $25 overdue fee and a $30 variation fee. MTF lists penalty interest of 5% a year on top of the contract rate, plus repossession-related charges if things go badly.

Nectar’s eligibility notes also mention having no serious bad debts or defaults. MTF does not publish a similar line on its car loan page. In both cases, a lender can still decline or adjust an offer.

Why repayment frequency matters

A fee charged per repayment adds up differently from one charged per month. Imagine a $12,000 car loan over three years.

• Nectar-style loan, made-up numbers: 13% a year, a $230 fee added to the loan, and $1.75 on each weekly repayment. The weekly repayment is about $94.77 plus $1.75, or $96.52, over 156 weeks. That is about $15,058 in all.
• MTF-style secured loan, made-up numbers: 12% a year, a $380 establishment fee and $10 for the PPSR search added to the loan, and $7.54 a month. The monthly repayment is about $411.53 plus $7.54, or $419.07, over 36 months. That is about $15,086 in all.

These figures are invented and do not come from either lender. The totals land within $30 of each other. If the Nectar-style loan were repaid monthly instead of weekly, the per-repayment fee would be paid 36 times instead of 156. That would cut about $210 from the fees for the same loan. The lesson: ask which payment schedule the quote assumes, and ask for the total.

What happens if you struggle

On a secured loan, the lender may be entitled to repossess and sell the car, and if the sale does not cover the debt, you can still owe the difference. MTF’s fee table lists a repossession warning fee and a repossession fee for this reason.

On an unsecured loan, the lender cannot repossess the car through a security interest, but it can still pursue the debt, add default charges and record the default on your credit file. Nectar’s overdue and dishonour fees are the published ones.

Either way, the law lets you ask a lender for changes if you hit unforeseen hardship, and your lender must consider the request. Call early. The Consumer Protection page linked below explains the process.

The legal frame for an online lender

Nectar sits in the same regulatory frame as MTF, but because the whole process is online, three points deserve attention.

• Disclosure arrives electronically. The lender must still give you a disclosure statement before you are bound. Download it. Do not rely on the screen.
• Click-through contracts are contracts. Read the rate, fee and repayment lines before you press accept.
• You can still use the dispute scheme. Nectar names FDRS. Every lender must belong to one, and you can check membership on the Financial Service Providers Register.

Reading the eligibility lines

Each lender publishes who can apply, and the lines are worth reading before you spend time on a form. Nectar’s page sets an income floor of $350 a week after tax, asks for a New Zealand citizen or permanent resident, and mentions no serious bad debts or defaults. MTF’s car loan page asks for a New Zealand resident or visa holder aged 18 or over with a New Zealand licence and regular income. If your situation is on the edge of either description, ask the lender before applying, since a lender looks at the whole picture and the published lines are a summary. Neither summary tells you what you would be offered.

How to choose

1. Decide which risk you prefer. Unsecured means no claim on the car. Secured generally means a lower rate.
2. Get the same loan from each. Equal amount, term and frequency.
3. Compare the total repayable. Not the rate, not the weekly figure.
4. Check the cheapest loan size. Nectar’s published range tops out at $50,000.
5. Ask what the credit check does. Both say starting does not affect your score, but confirm before submitting.
6. Use a third quote. The cheapest car finance guide explains where to look.

Next steps

1. Fix your budget with a buffer for insurance and running costs.
2. Check your rate or ask for a written offer from each lender.
3. Ask for all fees in writing, including any per-repayment fee.
4. Find out the early repayment cost and the hardship process.
5. Confirm the dispute scheme.
6. If you would like a broker to compare lenders, the /check form passes your details to a broker partner, who compares lenders for you and calls you back.

Checklist

• Two quotes on the same loan.
• Security status of each: secured or unsecured.
• Every fee, including per-repayment fees.
• Total repayable at your preferred frequency.
• Early repayment cost.
• Complaints scheme.

Red flags

• A rate shown as “from” with no personal figure.
• A fee list that only appears after you click accept.
• Being told you are approved before the lender has assessed you.
• Extras or insurance added without their own price.
• Pressure to sign the same day.

If you cannot meet repayments, tell the lender straight away and call MoneyTalks on 0800 345 123.

Sources

• Nectar: rates and terms
• Nectar: about
• Nectar: feedback and complaints
• MTF: interest rates and fees
• MTF: car loans
• MTF: contact and complaints
• Consumer Protection: what lenders must do
• Financial Service Providers Register