Get access to much-needed funds end enjoy more flexibility with an unsecured personal loan.
An unsecured personal loan lets you borrow funds without using an asset as security. This type of loan comes gives you more flexibility in terms how you use your loan amount. You can use your funds to make a large purchase, consolidate debt, or anything else you like. Find out if this type of loan is right for you by reading this guide.
- Loan amounts from $5,000
- Offers a reusable credit facility
- Repay over 5 years
100% confidential application
Citi Personal Loan Plus
Apply for a Citi Personal Loan Plus and get competitive interest rate offer with a reusable credit facility.
- Interest rate from: 11.99% p.a.
- Comparison rate: 12.77% p.a.
- Interest rate type: Variable
- Application fee: $199
- Minimum loan amount: $5,000
- Maximum loan amount: $75,000
Compare a range of unsecured personal loans
Disclaimer and warning about borrowing
- No loans offered with repayment in full due in 60 days or less
- Interest rates range no higher than 36% APR
- A representative example is expressed in the table above with all fees and charges payable in the Monthly Repayment column with the representative APR expressed in the comparison rate column.
* The personal loan offers compared on this page are chosen from a range of personal loans finder.com.au has access to track details from and is not representative of all the products available for comparison in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing personal loans.
How unsecured personal loans work
Unsecured loans involve you receiving a certain amount of funds that you can use for any worthwhile purpose. You then pay the funds back with fees and interest. While you can generally use the funds how you choose, when you apply for the loan you may be asked to list why you are applying for it, and this will form part of the lender's decision.
When completing your application you will also need to list how much you want to borrow and how long for. Unsecured personal loans offer amounts varying between $1,000 and $50,000 and loan terms varying between one and seven years.
You'll find that unsecured loans come with higher rates than secured loans because the lender is taking on more of a risk. These loans can also come with establishment fees, monthly fees and annual fees, so be sure to check these before you apply.
Unsecured personal loans can be fixed or variable and repayment restrictions differ between lenders – you may be able to make additional repayments and repay your loan early without penalty depending on your loan.
Why is the interest rate higher than a secured loan?
Interest rates on unsecured loans are higher for borrowers as the lender is taking on a higher risk. If your loan is secured the lender can take the asset you've used for collateral to recoup the outstanding amount but this isn't possible with an unsecured loan. To safeguard themselves, lenders charge more interest so they have more to fall back on should you default.
What to know to compare your options
Comparing your unsecured personal loan options is an important part of finding the right loan for you. Here are some things to keep in mind when doing so:
- Interest rate. Check whether the interest rate is fixed or variable and whether it's competitive.
- Minimum and maximum loan amounts. All lenders will set a minimum that you can borrow and the majority will have a maximum – these usually vary between $1,000 and $50,000. While you may not be eligible for either it's important to check that the amount you need falls between the two.
- Fees and charges. You can be charged upfront and ongoing fees with unsecured personal loans, so check what these are before you apply. You can look at the comparison rate to see an overall cost for the loan which includes these fees.
- Additional features. Your loan may come with additional features that you might find convenient, such as online account management, a redraw facility to access additional repayments or discounts on additional products offered by the lender.
Financing a trip away
Horace is looking for a way to finance his travels over the break before he returns to work as a school teacher. He doesn’t have enough money saved and so is looking to take out an unsecured personal loan, knowing he’ll be able to afford ongoing repayments on his current salary. He compares his options and finds a loan he’ll be able to afford to repay within a year, not wanting to run the risk of a longer repayment period in case he loses his job. He checks he’s eligible and then applies. He soon finds out he’s been approved and makes his way to the Canary Islands.
Weighing up the good and the not so good of unsecured personal loans
- No asset needed for security.
When getting an unsecured personal loan, there’s no need to supply an asset as security. If you're purchasing an asset with your funds you won't have to risk it, and you also won't need to risk an asset you already own.
- Flexible loan purpose.
You can use the funds however you like. Once you're approved the funds will be transferred to you and you can use them to consolidate debt, purchase what you need to or to invest.
- Easy application process.
Applying for one of these loans is usually quite easy. The application can typically take place online if you can provide the appropriate documentation required. After the application, you can usually get a response in 60 seconds.
- Unsecured loans can have higher fees.
As there is no security with an unsecured personal loan, there are higher fees enforced by the lender to compensate for the lack of security provided by you. This may come in the form of an establishment fee.
- Penalties for missed payments.
Again, as there is no security asset on an unsecured personal loan, the lender can charge you high fees for late payments or even take legal action against you and take you to court if you default on the loan.
- Higher interest rates due to no collateral being offered
As there is a higher risk involved from the lender, the interest rates are generally higher on unsecured loans. This is to cover the fact that there is no collateral involved with the loan.
Things you should consider avoiding
- Lying about what you need the funds for. Always be upfront with your lender about why you're applying for the loan, whether it be for business purposes or to consolidate debts.
- Getting into too much debt. If you are taking out an unsecured loan to consolidate existing debts, you should be wary of getting yourself into financial trouble by increasing your debt. Make sure you'll be paying less with this new loan than you are currently.
- Check the brand providing your credit is licensed. Always make sure you are getting a loan from is a licensed lender. All providers must be licensed with ASIC; you can search through the ASIC Professional Register to check this.
- Fees and charges. Where possible, always do your best to avoid excessive fees and charges. The best way to do this is to make sure you do your research, ask questions and compare.
How you can apply for an unsecured personal loan
If you think an unsecured personal loan is for you, all you need to do is use the finder.com.au comparison table to compare your unsecured personal loan options. After browsing through the table and finding a suitable loan, click the relevant link to go to the lender’s website and start the application process.
Typically, to get an unsecured personal loan you'll need to meet a range of criteria set by the lenders.
- You must be at least 18 years old.
- You must also have a good credit rating and be able to provide proof that you can pay off the loan.
- You may be asked to provide copies of your payslips, bank account statements and other credit contracts.
- You'll also need to provide 100 points of ID.
Frequently asked questions
Can I get an unsecured personal loan for business purposes?
Some lenders may allow you to use the funds from an unsecured personal loan for business purposes, but others will not. You will need to confirm this with the lender before you apply.
How can I get a low rate unsecured personal loan?
While unsecured personal loans do generally come with higher rates than secured personal loans, you can still find a competitive low rate option. Compare your options using the table above and find a loan that meets your budget.
How long do I have to repay an unsecured personal loan?
Fixed rate unsecured personal loans tend to offer terms of between one and five years and variable rate unsecured personal loans tend to offer terms of between one and seven years.
I applied for an unsecured personal loan but the rate I received was different to the advertised rate. Why?
There are two reasons this might have happened: A lender may operate on a tiered-rate system where your rate is determined by the information in your application, or the lender approved you but found you to be a higher risk, so applied a higher rate to your account.