How interest rates and borrowing limits work
- Harmoney
- Jul 29
- 2 min read
Updated: Jul 31
Harmoney’s interest rates
We believe risk-based interest rates are fairer and more transparent.
Risk-based interest rates are a simple concept: the less risky it is to lend to a borrower, the lower their interest rate should be — and vice versa — higher rates apply when lending is riskier.
There’s some level of risk in all lending, but the amount of risk varies from person to person. Traditionally, lenders have used a shortcut to account for this variability: charge everyone the same rate. The problem with that approach is that some people end up paying more than they should, while others are declined when they may not need to be.
Harmoney was one of the first lenders in New Zealand and Australia to introduce rate-for-risk interest rates.
How interest rates are calculated
There are a number of factors that go into calculating an individual interest rate. A key one is your credit score, which is based on your credit history — how you've managed credit in the past. Other factors that may influence your rate include:
Stability of employment
Stability and type of residence
Financial behaviour
Demographic profile
Get your rate
If you're thinking about applying for a loan, you can check what interest rate would apply to you using our online quote tool.
During the quote process, you'll provide some basic financial information, including consent for us to review your credit file.
Getting a quote won’t affect your credit score.
Based on our assessment, we’ll assign you an interest rate. From there, you can decide whether you’d like to proceed with the loan at the offered rate.
Borrowing limits
Harmoney’s credit policy includes borrowing limits tied to interest rates, which are part of our overall credit risk assessment. However, interest rates aren't the only factor. Your borrowing limit also reflects what you can comfortably afford to repay each month.
This is in line with our Responsible Lending practices, which are designed to ensure loan limits don’t lead to financial stress.
Loan calculator
For a quick estimate of how much you could borrow — and what your repayments might be — try our personal loan calculator.
Total cost of borrowing
To understand the cost of interest over the life of a loan, you can download a detailed Excel or PDF breakdown showing the total cost of borrowing for example loans over 3- and 5-year terms. These examples include various loan amounts and interest rates.
