Payday lender moves into car finance

Moola, the payday and short-term loan provider founded in 2013, is finalising plans to launch vehicle finance product Zooma. Zooma aims to offer same-day financing for customers in need of a quick purchase. Terms of the product will be announced later this month but interest rates are expected to start from about 15%.

The car finance product will first launch as a direct-to-consumer proposition online, the Christchurch-based company said. Edward Recordon, director at Moola, said the company was keen to “improve the speed at which customers can get a vehicle finance loan”, and indicated advisers would be able to access the product.

Recordon said Moola was “looking at introducing a broker channel for our vehicle financing product”. He added: “We’re about to launch our product in the next few weeks and to start with we are going to attend to our existing customer base. We want to do a couple of hundred vehicle loans per week. As we grow, we will find we need to use advisers as a good channel of getting new customers.”

Recordon added: “What we have done well is develop our own online process for unsecured loans. To integrate secured lending has taken a while, but we have managed to streamline it. Someone who applies now will be able to buy it by the end of the day. In New Zealand, it takes days to go through that process.”

Recordon said the move into car finance was spurred by young people struggling to obtain financing: “The main reason is that many young people may have a [debt] collection to a telecom or power company, and mainstream lenders don’t like customers with adverse credit.”