Frequently asked questions. Just in case.

We thought we’d pre-empt a few questions that you might have. So take a look and if you can’t find the answer you’re looking for, fill in the form below and we’ll get back to you as soon as.

  • Will Squirrel Money lend to me?

    We’re not the right lender for everyone. Our focus is on high quality creditworthy borrowers earning an income of at least $25,000 per year (you also can’t be earning the majority of your income from Government benefits). If you’re not good with money and have poor account conduct or a poor credit file, then we are unlikely to lend to you.

  • Can I repay my loan early?

    Yes. You can repay your loan as quickly as you like and at no additional cost.

  • How much money can I borrow?

    We provide unsecured personal loans from $3,000 to a maximum of $29,999. We also offer secured personal loans between $30,000 and $70,000 when fully covered by property or motor vehicle.  

    How much does it cost to borrow?

    Our up front establishment fee is $250 flat rate for loans under $30,000 and $500 for loans $30,000 and above.

  • How long can I borrow for?

    The minimum loan term is 2 years and the longest is 5 years but once you have a loan you can pay it back as quickly as you like at no additional cost.

  • What happens if I miss a payment?

    If you miss a payment we’ll follow up with you to find out what’s up and give you 5 day’s grace to get the account back in order. Should your account remain out of limit after this period you will be charged a $25 default fee per month and begin accruing penalty interest on your loan account at 5.0% p.a. above your normal interest rate. 

  • Who can invest with Squirrel Money?

    We only allow NZ tax residents over 18 years of age to invest through our platform. 

  • How much interest can I expect to receive?

    Our current market interest rates are displayed on our Investor page. When bidding for an investment, Investors choose the minimum interest rate they are willing to accept on their investment between a range of 6% and 8.5% p.a. depending on the investment term and the product they are investing in. The interest rate you choose when bidding on the Platform is the minimum gross interest rate you will receive on your investment, before RWT (Resident Withholding Tax) is deducted.When funding a loan, we use the lowest available investor rates in the Platform first to ensure we can offer the most competitive interest rates and continue to attract high quality borrowers.

  • Is there a fee for investing?

    There are two fees that can be charged to Investors:

  • Service Margin: We deduct a Service Margin of between 0.95% and 3.0% of the gross interest payments made by the Borrower under their loan Agreement. Service Margins vary between products and borrowers and can be dependent on borrower Risk Grade. 

  • Please note however, that when you place an investment order, the rate you bid into the Platform is the minimum gross rate of return that you will receive on that investment. The Service Margin has effectively been deducted at that point. The only deductions applied to your investment return from that point forward will be for Resident Withholding Tax (at a rate that you nominate) on the interest you are credited with once your investment order is matched to an approved borrower. 

  • Secondary Market Fees: This fee is charged to the Investor and deducted from the net proceeds from the transfer of a loan to another Investor in the event that an an investment is sold on the Secondary Market. The fee is 1% of the loan balance transferred, up to a maximum of $50 per investment.

  • For a breakdown of our fees, check out our Fees page.

  • Can I get my funds out early?

    Our Secondary Market allows an Investor to sell an investment at any time provided there is another Investor willing to match the original terms of their investment (amount, term and interest rate). The option to sell your investment can be found at the bottom of the ‘Investments’ tab on your investor dashboard. We deduct a fee of 1% (up to a maximum of $50) from your investment balance when it is sold through the Secondary Market. Read more about the Secondary Market in our Secondary Market Policy.

  • Why am I receiving more interest than I expected?

    If there are multiple Investors funding a single loan, the interest rate received will be at the highest requested rate of all the Investors required to fund that loan. Therefore, it’s possible to receive a higher interest rate than you originally requested. For example, three investors contribute $20,000 each to fund a $60,000 loan. Two Investors requested an interest rate of at least 7% while one had requested a rate of at least 7.5%. Under this scenario, all three Investors will receive an interest rate of 7.5% on their investment.

  • Is my return taxed?

    We will deduct Resident Withholding Tax (RWT) from your interest payments. This is paid to IRD on your behalf each month. At the end of the year, we will issue you with an IR15 certificate that you can use for your tax return. You can expect this by 20th May following the tax year-end.

  • What happens if a Borrower misses a payment?

    For the Investor, the Reserve Fund will attempt to cover the missed payment. The ability of the Reserve Fund to cover arrears and defaults is reliant on there being sufficient funds available in the Reserve Fund. Find out more about how the Reserve Fund works here.

  • When the Borrower catches up with repayments, any extra payment will be paid back into the Reserve Fund until the arrears are cleared.

  • Borrowers are actively managed when they go into arrears on a loan. We’ll contact them initially to find out what’s happening and put a repayment plan in place if required. If we’re unsuccessful, then after one month it is passed to our external collection agency for collection. For more information about how we assess the risk of our Borrowers defaulting, read our Investor Booklet.

  • What is the market rate? 

    The market interest rate is the average rate Investors have received on recently funded loans.

  • Is investing through Squirrel Money guaranteed?

    The short answer is no. We've minimised the risk as much as we can though by putting in a Reserve Fund, taking out cyber and fraud insurance, as well as employing strict lending criteria. Find out more about how the Reserve Fund works here. 

  • How likely is it that the Reserve Fund runs out?

    The 'modelled' expected average life time loss rate on loans originated through our Platform (based on the profile of our existing loan book) is between 1.8% and 1.9% of the original loan amounts. 

  • The reserve levy that is collected from each Borrower repayment is intended to exceed the expected credit losses over the life of our loan book and ensure the Reserve Fund grows over time. We regularly review our reserve levy rates in the context of loan book performance and the Reserve Fund balance to ensure we are collecting sufficient reserves to offset future credit losses. 

  • The current average Reserve Levy for active loans is circa 2.2% per annum and that is forecast to generate Reserve Levies in the vicinity of 3.1% of the original loan amounts over the life of those losses. Reserving at that level provides more than 1.6x coverage over the expected life time loss rate. 

  • Whilst this does not guarantee your investment, the Reserve Fund provides a buffer to help protect investments from expected credit losses (and then some) and provide investors greater predictability of investment repayments. 

  • If the event that the Reserve Fund was to run down dramatically, we maintain the ability to divert up to 100% of future Investor interest payments (not capital) into the Reserve Fund to cover credit losses. This effectively means losses are socialised across all Investors in the Platform and helps protect the capital of all Investors. Read more about this in our Investor Booklet

  • How safe is my money?

    Investor funds are held in an Independent Trust and do not form part of Squirrel’s business or assets. We rigorously check our Borrowers to ensure they’re creditworthy. We have Loan Shield to help cover expected credit losses and insurance to protect against acts of cyber-crime and fraud. In a nutshell, we work hard to look after your money.

  • What is the minimum investment?

    The minimum bid amount for an investment is $500. The maximum you can invest through our platform is $2 million. So you’re free to bid anywhere within in this range. 

    Our Borrowers can borrow anywhere from $1,000 to $70,000 (depending on the product) so you can even bid an order for $70k which is the maximum borrower amount. In this case, it’s possible that your investment will go into only one loan. Investment bids of more than $70k will be split across more than one loan. It is possible that investment bids of lower than $70k could also be split across multiple loans. Because we operate a Reserve Fund, you don’t need to spread your risk across multiple loans, which makes this an easier investment option. For more information about how the Reserve Fund operates, please click here.

    The only thing to bear in mind with larger investment bids is the Secondary Market. Investments sold on the Secondary Market require the whole investment to be sold, on a 1:1 ratio. In this case, a larger investment, such as $70k, would be harder to sell.

    For example, to sell an investment of $70k on the Secondary Market, it will rely on another investor to:

    a) have an Investment Order size of at least that value; and

    b) have a bid at an interest rate less than or equal to your investment's interest rate. e.g if the investment being sold has an interest rate of 7.5%, and the other investor's investment order has a bid rate of 8%, this will not be matched. But an investment order of 7.5% or less will match.

    So, if you intend on selling an investment at any stage, you should keep this in mind when creating your investment orders.

  • When I deposit funds into my account on Friday, why can I not invest them until after the weekend?

    Squirrel Money receives bank transactions from ASB daily for the previous day so the system is always one day behind. Also we don’t receive a bank feed on Sunday.

  • Why can't money be instantly invested in loans?

    There are a several reasons why your investment order may not be instantly matched and invested in a loan.

    * The platform attempts to match investment orders with loans at 30-minute intervals; 

  • * Your investment order is not for the same investment term as loans available on the Platform;

    * Loans need to be 100% funded before any investment orders are allocated to a them. For example, if a $10,000 loan requires funding and you have placed a $5,000 investment order, we would need other investor funds to fund the remaining $5,000 before your investment order can be matched to it;

    * There could already be sufficient investment orders in the Platform at lower interest rates for the same investment term. These investment orders would be used first to fund an awaiting loan and provide a borrower with most competitive interest rate.

  • What happens if Squirrel Money fails?

    Investor funds and loans are held inside an Independent Trust and cannot be accessed in the event of Squirrel Money Limited failing.

  • In the event that Squirrel was placed into receivership (or the like), we have set aside sufficient funds by way of a bank bond (underwritten by ASB Bank) for the benefit of the Independent Trustee. This bond (plus access to the ongoing Service Margin on loan repayments) is in place to ensure an appointed third party can continue to administer the collection of borrower repayments and payments to investors until such time as the loan book is wound up. 

  • As part of our license we maintain a disaster recovery and termination plan. In the event that the Platform ceases operation, any balances remaining in the Reserve Fund following repayment of all outstanding Loans and otherwise at the end of any managed wind-up process, will be donated to the Starship Foundation or such other charity having similar charitable purposes selected by the Trustee or any other person primarily responsible for the winding-up of the Platform.

Still unsure? Flick us a question and we'll get back to you.