Secured vs unsecured personal loans

Not sure whether a secured or unsecured personal loan is right for you? We show you the differences to help you make the right choice.

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A personal loan can help you take your next step if you don’t have ready finance. Whether you want to buy a car or undertake home renovations, you’re likely to find a number of different lenders and loans to choose from.

If you’re looking to purchase an asset, or you already have one, you may be considering whether a secured or unsecured personal loan is a better option for you. We break down the differences in the guide below.

What is the difference between secured and unsecured personal loans?

The main difference between these two loans is that with a secured personal loan you have to provide an asset as a guarantee, while you don’t with an unsecured personal loan. If you default on a secured personal loan, the lender can repossess the asset and sell it to recoup its losses. The asset is usually one you are purchasing with the funds you are borrowing from the lender, but it can also be an asset you already own.

Secured and unsecured personal loans you can apply for

Find both secured and unsecured loan options by clicking through each of the tabs and compare what's available.

Beyond Bank Low Rate Car Loan "Special Offer"

Beyond Bank Low Rate Car Loan "Special Offer"

5.49 % p.a.

fixed rate

5.73 % p.a.

comparison rate

  • Low fixed interest rate
  • Offset and redraw feature
  • Borrow from $25,000
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100% confidential application

Beyond Bank Low Rate Car Loan "Special Offer"

Apply for Beyond Bank Car Loan and enjoy a great low fixed interest rate with no ongoing fees. You'll also get access to a limited time 'Special Offer' rate on your loan.

  • Interest rate from: 5.49% p.a.
  • Comparison rate: 5.73% p.a.
  • Interest rate type: Fixed
  • Application fee: $175
  • Minimum loan amount: $25,000
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Promoted
Updated October 23rd, 2019
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
From 4.79% (fixed)
5.34%
$10,000
1 to 7 years
$400
$0
You'll receive a fixed rate of 4.79% p.a. with a comparison rate of 5.34% p.a.
Get access to over 20 providers to fund a new or used car.

5.49% (fixed)
5.84%
$2,000
1 to 7 years
$250
$0
You'll receive a fixed rate of 5.49% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
From 4.69% (fixed)
5.64%
$10,000
3 to 7 years
$700 (for private seller vehicles this fee is $608)
$9
You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $100,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
6.99% (fixed)
8.1%
$5,000
1 to 7 years
$295
$10
You'll receive a fixed rate of 6.99% p.a.
Finance a new or used car up with loans from $5,000 and benefit from flexible repayments.
5.49% (fixed)
5.73%
$25,000
1 to 7 years
$175
$0
You'll receive a fixed rate of 5.49% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
From 5.19% (fixed)
6.08%
$5,000
3 to 7 years
$655 (Includes PPSR registration and private sale fee, if applicable)
$0
You'll receive a personalised interest rate from 5.19% p.a. to 5.69% p.a. based on your risk profile
A flexible car loan from $5,000 - $50,000 with personalised rates and rewards for strong credit customers.

From 5.69% (fixed)
6.39%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 5.69% p. a.
Purchase a new car with this loan and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
From 5.69% (fixed)
6.39%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 5.69% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
From 4.89% (fixed)
5.44%
$5,000
3 to 5 years
$400
$0
You'll receive a fixed rate from 4.89% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment.
From 5.71% (fixed)
6.57%
$1,000
1 to 7 years
$500 (from $100 to $500)
$10
You'll receive a fixed rate between 5.71% p.a. and 8.66% p.a. based on your personal credit history
A flexible loan to help you finance a car, motorbike or boat up to five years old.
From 7.99% (variable)
8.96%
$10,000
1 to 10 years
$200
$10
You'll receive a variable rate from 7.99% p.a.
Apply for up to $75,000 and benefit from features such as fast approval, free online redraws and no penalties for early repayment.
8.49% (fixed)
9.67%
$10,000
1 to 7 years
$250
$12
You'll receive a fixed rate of 8.49% p.a.
Finance a new or used car and benefit from convenient features for car buyers including a car search tool and the option to borrow extra for on-road costs.
From 8.49% (fixed)
9.6%
$3,000
1 to 5 years
$195
$12
You'll receive a fixed rate from 8.49% p.a. based on the value of your car
Get a competitive rate and apply for a larger loan up to $80,000 when you attach a new or used car as security to the loan.
6.69% (fixed)
7.04%
$2,000
1 to 5 years
$250
$0
You'll receive a fixed rate of 6.69% p.a.
Benefit from this competitive rate by securing the loan with a vehicle up to 6 years old. Use this flexible loan for any purpose.
From 12.99% (fixed)
14.2%
$3,000
1 to 7 years
$250 (Loans under $5000 - $140)
$13
You'll receive a fixed rate between 12.99% p.a. and 28.99% p.a. based on your risk profile
Lock in a competitive variable rate when you offer security. Loan can be used for any purpose and repayments are flexible.
From 6.99% (fixed)
7.7%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 6.99% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
From 5.99% (fixed)
6.63%
$10,000
1 to 10 years
$200
$5
You’ll receive a fixed rate of 5.99% p.a. ( 6.63% p.a. comparison rate ).
Apply for up to $75,000 available with asset security. Only good credit applicants can apply for this loan.

Compare up to 4 providers

RateSetter Unsecured Personal Loan - 3yr Variable

RateSetter Unsecured Personal Loan - 3yr Variable

From

7.89 % p.a.

variable rate

From

9.90 % p.a.

comparison rate

  • Get a personalised comparison rate based on your credit score
Security Logo

100% confidential application

RateSetter Unsecured Personal Loan - 3yr Variable

RateSetter offers this unsecured personal loan with a fixed or variable rate. Receive a tailored interest rate from 7.89% p.a. based on your risk profile.

  • Interest rate from: 7.89% p.a.
  • Comparison rate: 9.9% p.a.
  • Interest rate type: Variable
  • Application fee: $299
  • Minimum loan amount: $2,001
  • Maximum loan amount: $45,000
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Promoted
Updated October 23rd, 2019
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
From 7.89% (variable)
9.9%
$2,001
6 months to 5 years
$299 (Based on $10,000)
$0
You'll receive a variable rate between 7.89% p.a. and 16.4% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 6 months. Interest and comparison rates calculated for a loan term of 3 years.
From 5.75% (variable)
7.31%
$5,000
1 to 7 years
from 2% to 5% of the loan amount
$10
You'll receive a personalised interest rate from 5.75% p.a. to 25.99% p.a. based on your risk profile
Borrow up to $50,000 to pay for what you need.
From 8.99% (fixed)
10.31%
$5,000
6 months to 2 years
$195
$0
You'll receive a personalised rate of between 8.99% p.a. and 29.99% p.a. based on your risk profile.
Borrow up to $10,000 over a 2 year loan term.
From 9.99% (variable)
9.99%
$5,000
3 to 5 years
$0
$0
You'll receive a variable rate between 9.99% p.a. and 17.99% p.a. (9.99% p.a. to 17.99% p.a. comparison rate) based on your risk profile
A credit limit up to $75,000 that you can continue to draw down over terms up to 5 years. Note: No establishment fee and no monthly account service fees apply if you apply and are approved before 31 March 2020.
From 6.99% (fixed)
7.69%
$2,000
3 to 5 years
$500 ($200 for loans of below $5,000)
$0
You'll receive a fixed rate between 6.99% p.a. and 28.69% p.a. based on your risk profile.
Apply for a loan up to $70,000 and repay your loan over 3 or 5 years terms.
From 7.5% (fixed)
9.51%
$5,000
2 to 5 years
from 3% of loan amount
$0
You'll receive a fixed rate between 7.5% p.a. and 17.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
From 8.95% (fixed)
10.56%
$5,000
18 months to 7 years
$495 (Based on $10,000)
$13
You'll receive a fixed rate between 8.95% p.a. and 16.95% p.a. based on your risk profile
Apply for loans from $5,000 and get a dedicated loan manager. No security required.
12.99% (fixed)
14.14%
$4,000
1 to 7 years
$250
$12
You'll receive a fixed rate of 12.99% p.a.
Benefit from the security of a fixed rate with the flexibility of additional repayments. Existing Westpac customers may qualify for discounts.
9.89% (fixed)
10.14%
$5,000
1 to 7 years
$175
$0
You'll receive a fixed rate of 9.89% p.a.
An unsecured loan from $5,000 with flexible repayments and no monthly fee.
From 10.69% (fixed)
11.58%
$5,000
1 to 7 years
$150
$10
You'll receive a fixed rate between 10.69% p.a. and 18.69% p.a. ( 11.58% p.a. to 19.53% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.
From 12.99% (fixed)
14.06%
$2,000
1 to 5 years
$195
$12
You'll receive a fixed rate between 12.99% p.a. and 18.9% p.a. based on your risk profile
A low minimum borrowing amount of $2,000 to fund a range of purposes.
From 13.99% (fixed)
15.19%
$3,000
1 to 7 years
$250 (Loans under $5000 - $140)
$13
You'll receive a fixed rate between 13.99% p.a. and 29.99% p.a. based on your risk profile
Apply for what you need from $3,000 and use it for a range of purposes. Flexible repayments options.
From 7.93% (fixed)
8.77%
$1,000
1 to 5 years
$500 (from $100 to $500)
$10
You'll receive a fixed rate between 7.93% p.a. and 18.87% p.a. based on your risk profile
An unsecured loan with a low minimum borrowing amount and flexible repayment options.
10.99% (fixed)
12.21%
$20,000
1 to 7 years
$250
$13
You'll receive a fixed rate of 10.99% p.a.
A secured or unsecured loan available to homeowners with a large minimum borrowing amount of $20,000. Benefit from flexible repayments and fast approval.
From 12.99% (variable)
16.42%
$3,000
1 to 7 years
$200
$10
You'll receive a variable rate of 12.99% p.a.
Apply for up to $50,000 and benefit from features such as fast approval, free online redraws and no penalties for early repayment.
11.89% (variable)
12.15%
$5,000
1 to 7 years
$175
$0
You'll receive a variable rate of 11.89% p.a.
Borrow from $5,000 with the option for flexible repayments and no monthly fees.
10.89% (variable)
11.15%
$30,000
1 to 7 years
$175
$0
You'll receive a discounted variable rate of 10.89% p.a.
Borrow over $30,000 and receive a discounted interest rate. No monthly fees and a redraw facility also available.
From 10.69% (variable)
11.58%
$5,000
1 to 7 years
$150
$10
You'll receive a variable rate between 10.69% p.a. and 18.69% p.a. ( 11.58% p.a. to 19.53% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes. Benefit from fee-free additional repayments and a redraw facility. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.
From 12.99% (variable)
14.06%
$2,000
1 to 7 years
$195
$12
You'll receive a variable rate between 12.99% p.a. and 18.9% p.a. based on your risk profile
A low minimum borrowing amount of $2,000 plus the convenience to make extra repayments and redraw them if you need them.
From 7.88% (variable)
8.72%
$1,000
1 to 7 years
$500 (from $100 to $500)
$10
You'll receive a variable rate between 7.88% p.a. and 18.82% p.a. based on your risk profile
An unsecured loan with flexible repayment options and a low minimum borrowing amount.
9.99% (fixed)
11.22%
$20,000
1 to 7 years
$250
$13
You'll receive a fixed rate of 9.99% p.a.
A secured or unsecured loan available to homeowners with a large minimum borrowing amount of $20,000. Benefit from flexible repayments and fast approval.
From 7.95% (fixed)
8.78%
$5,000
3 to 5 years
$595
$0
You'll receive a variable rate between 7.95% p.a. and 19.45% p.a. based on your risk profile
A loan from $5,000 that charges no fees for extra or early repayments. Keep in mind security is required in some cases. Note: WISR is not available to applicants who have previously taken out payday loans.

Compare up to 4 providers

What kind of assets can be used as security?

Lenders are willing to use all kind of assets that hold value as guarantees for loans. Whether you are looking to purchase one of the following items or already own one, you might be able to use it as security for a loan:

  • Vehicles. This includes new and used cars, motorbikes, boats, caravans and even jet skis.
  • Property. If you own a property outright or hold equity in a mortgaged property, you can use it as security for a loan.
  • Term deposits. If you hold a term deposit account with a lender, they may be willing to use the amount as a guarantee for a loan.
  • High-cost assets. Some lenders will accept high-cost jewellery, fine art and other items as security for loans.

What type of loan is better for you?

If you’re unsure what type of personal loan you should be applying for, here are some considerations to keep in mind:

  • If you’re buying a vehicle. The age, cost and type of vehicle will have a bearing on whether you can or should get a secured personal loan or whether an unsecured loan will be a better option for you. Some lenders will only accept new vehicles (generally less than two years old) as a guarantee. If you want an older car, it may need to pass a vehicle inspection check and still need to be under a certain age, usually seven years.
  • If you want to use the loan amount for various purposes. Lenders offering secured loans tend to place restrictions on the use of the loan amount. For instance, if you are taking out a secured car loan but also want to buy some furniture, the lender may not let you borrow more than the cost of the car.
  • If you aren’t looking to purchase an asset. You will need to already own the asset you want to use as security. While this is a less common form of secured personal loan, it is an option offered by some lenders.

How you can compare secured and unsecured personal loans

While both types of loans are a viable way for you to finance a new purchase, you can find the option that better suits your needs by comparing them to one another. Here are some main points of comparison:

  • Interest rates. As secured personal loans are less risky for lenders, they tend to come with lower interest rates. You can find fixed and variable rates for both secured and unsecured loans.
  • Fees. You won’t find a great difference in fees between the two loan types. Expect establishment fees for both types of loans, although you can find lenders that don’t charge any fees to set up the loan. Some loans come with monthly fees, but these are not standard, so make sure to compare so you know your loan is competitive.
  • Flexibility of repayments. The difference lies in whether the loan is fixed or variable. If you apply for a fixed rate loan, you are more likely to find penalties for extra repayments and repaying your loan early. Variable rate loans are less likely to have these penalties. Compare lenders to find the most competitive option.
  • Loan terms. For both secured and unsecured loans, you will generally find terms of between one and five years for fixed rate loans and one and seven years for variable rate loans.
  • How you can use the funds. If you apply for an unsecured loan, you can generally use the funds for whatever purpose you want. Secured loans tend to come with more restrictions. For instance, if you’re taking out the loan to pay for a car, the lender may require you to use the entire loan amount to pay for the cost of the vehicle.

What to consider before you apply

  • Will you be able to afford the repayments? If you’re opting for a secured personal loan, the lender will be able to repossess your asset if you can’t afford the repayments. If you are considering an unsecured personal loan, keep in mind the interest rate is likely to be higher and so your ongoing repayments will be more costly.
  • How much flexibility do you want with your loan amount? If you want to use your loan to make a large purchase as well as a number of other items, check whether this is allowed by your secured loan lender. If you can’t find a secured loan that allows for this, you may need to apply for an unsecured personal loan.
  • Do you want a fixed or variable rate loan? Depending on the type of loan you want to take out, you may find more fixed or more variable rate loan options. For instance, if you’re considering a secured car loan, you may find more fixed rate loans than variable rate loans. It’s important to compare all available options before you apply.

The points will also come back to comparison – which option is best for you? The only way to work it out is to consider your situation, your needs and the loan type that is going to work for what you want.

Frequently asked questions

What’s the difference between a secured car loan and an unsecured car loan?

A secured car loan will use the car you purchase as security for the loan in case you default. With an unsecured car loan, you still use the funds you borrow to purchase the car, but the vehicle isn’t attached to the loan as security.

Is VET-FEE HELP loan secured or unsecured?

Your student loan, obtained through the VET-FEE HELP loan program, is unsecured.

Is there a difference between a secured loan and a secured car loan?

Yes. A car loan is a type of secured loan specifically used to purchase a vehicle. A secured loan is a general type of loan where a number of different assets, including vehicles, can be used as security for the loan.

What’s the difference between a secured home equity loan and a mortgage?

A home equity loan uses the equity you hold in your property as security and usually comes in the form of a revolving line of credit. People often use home equity loans for home renovations. On the other hand, a mortgage is taken out for the purpose of buying property, with the entire property being used as security for the loan.

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Personal Loan Offers

Important Information*
Logo for Citi Personal Loan Plus
Citi Personal Loan Plus

You'll receive a variable rate between 9.99% p.a. and 17.99% p.a. (9.99% p.a. to 17.99% p.a. comparison rate) based on your risk profile
A credit limit up to $75,000 that you can continue to draw down over terms up to 5 years. Note: No establishment fee and no monthly account service fees apply if you apply and are approved before 31 March 2020.

Logo for RateSetter Unsecured Personal Loan - 3yr Variable
RateSetter Unsecured Personal Loan - 3yr Variable

You'll receive a variable rate between p.a. and 16.40 p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 6 months. Interest and comparison rates calculated for a loan term of 3 years.

Logo for Harmoney Unsecured Personal Loan
Harmoney Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 28.69% p.a. based on your risk profile.
Apply for a loan up to $70,000 and repay your loan over 3 or 5 years terms.

Logo for NOW FINANCE Personal Loans
NOW FINANCE Personal Loans

You'll receive a fixed rate between 8.95% p.a. and 16.95% p.a. based on your risk profile
Apply for loans from $5,000 and get a dedicated loan manager. No security required.

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