types-of-loans

Types of personal loans

Getting a loan gives you access to money as and when you need it, and you can get one to serve just about any purpose.

The kind of loan you should look for depends on what you want the money for, because different loans serve distinctly different purposes and they come with varied features. You might, for example, require a student loan to pay tuition fees, a car loan to buy a car, a personal loan to go on a vacation, or a home loan to buy a home.

How does a loan work?

While different types of loans offer different features and take different factors into account, one aspect remains the same: you borrow money, and you repay it in installments over a period of time along with any interest, fees, and charges that it attracts.

You can get a fixed rate loan or a variable rate loan, and they also vary in terms of secured and unsecured.

About comparing personal loans

What are the types of loans available in Australia?

Loan typeWhat is it?Loan amountLoan termsEligibilitySpecial features?
Secured personal loanA loan used to purchase an asset that is used as a guarantee or a loan used for any purpose that requires a guarantee$1,000 - $80,0001 to 7 years
  • Over 18
  • Good credit
  • Regular income
  • Guarantee meets criteria
Lower interest rate than an unsecured personal loan
Unsecured personal loanA loan that can be used for almost any purpose$1,000 - $50,0001 to 7 years
  • Over 18
  • Good credit
  • Regular income
Funds can be used for almost any purpose
Car loanA loan specifically designed to purchase a new or used car$1,000 - $80,0001 to 7 years
  • Over 18
  • Good credit
  • Regular income
  • Vehicle meets criteria
You can get a car loan for vehicles up to 10 years old
Short term loanA loan up to $10,000 that is repaid in 16 days to one year$100 - $10,00016 days to 1 year
  • Over 18
  • Receiving an income
Can receive funds within the hour
OverdraftA type of credit attached to a transaction account$100 - $30,000Ongoing
  • Transaction account be in good standing
  • Over 18
Access it from your transaction account
Line of creditA maximum credit limit you can draw up to and including$5,000 - $75,000Ongoing
  • Over 18
  • Good credit
  • Regular income
Only repay what you borrow

How do I decide between my loan options?

If you aren't sure which loan type will be right for you, ask yourself the following to narrow down your options:

  • How much do you need to borrow? The loan types have varying funds that will be available, and each lender will offer a different maximum and minimum loan amount. Make sure how much you need to borrow falls within that range.
  • How long do you need the loan for? Each loan type has different loan terms. Find out what lenders are offering and pick a loan that offers an affordable repayments period.
  • When do you need the money? Some lenders can have the funds to you sooner than others, and some loan types lend themselves to quick turnaround. For example, short term loans. Find out how long it will take to receive your funds.
  • Do you want the option to access more money? Topping up a fixed amount loan, such as a secured or unsecured personal loan or a car loan, is difficult and usually involves you taking out another loan. If you think you might need additional funds, opt for an overdraft or line of credit.

Is there anything you should avoid?

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  • High interest rates. Some loans come with exorbitant interest rates, and in some instances, you might have to end up paying more in the form of interest than what you originally borrowed. These are situations you should avoid, and requires that you compare interest rates of loans before you apply.
  • High fees and charges. Almost all loans types attract some or the other kind of fees and charges, and it is best that you find out about these at the onset. Avid taking a loan without addressing this aspect, and compare application fees, loan disbursement fees, exit fees, late payment charges, transaction charges, and all other applicable fees and charges.

Before you apply for any kind of a loan, know that you always have options in terms of lenders and comparable offerings. As a result, compare a few before moving forward with the application process.

Compare loan types

To get an idea of how much each loan types cost, and where you can save, compare rates and fees for the different loan types below. You can also click on the name of the loan to see my details on fees.

Rates last updated April 27th, 2018
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
NAB Personal Loan Unsecured Fixed
11.99% (fixed)
12.87%
$5,000
1 to 7 years
$10
$150
An unsecured personal loan with a competitive fixed rate that you can make additional repayments to without penalty.
SocietyOne Unsecured Personal Loan
From 7.5% (fixed)
9.51%
$5,000
2 to 5 years
$0
3% (of loan amount)
Based on your risk profile, you will receive a tailored rate between 7.5% and 20.49% with a SocietyOne personal loan.
HSBC Personal Loan
From 9.5% (fixed)
10.06%
$5,000
1 to 5 years
$5
$150
A competitive fixed interest rate loan with the option to make extra repayments. Rates range from 9.5% p.a. to 15.99% p.a. based on your credit history.
Citi Personal Loan Plus
From 8.99% (variable)
9.96%
$5,000
3 to 5 years
$10
$199
Borrow up to $75,000 to use for a range of purposes. You’ll receive a rate of between 8.99% p.a. and 17.99% p.a. depending on your risk profile. (Comparison Rate of 9.96% p.a. to 18.91% p.a..)
Westpac Unsecured Personal Loan
12.99% (fixed)
14.14%
$4,000
1 to 7 years
$12
$250
Borrow up to $50,000 for a term of up to 7 years with this unsecured loan.
Latitude Personal Loan (Unsecured)
From 13.99% (fixed)
15.19%
$3,000
2 to 7 years
$13
$250 (Loans under $4000 - $140)
An unsecured loan with a tailored rate from 13.99% p.a. to 29.99% p.a. designed for multiple purposes including renovating, buying a car or travelling.
RACQ Unsecured Personal Loan
12.95% (variable)
13.25%
$3,000
5 years
$0
$200
Apply for up to $60,000 to use for a variety of purposes end enjoy no penalty for early repayment. Note: You must be a QLD resident to apply.
MyState Unsecured Personal Loan
12.99% (variable)
16.42%
$3,000
1 to 7 years
$10
$200
Apply for up to $50,000 and make additional repayments at any time without penalty.
NAB Personal Loan Unsecured Variable Rate
15.69% (variable)
16.55%
$5,000
1 to 7 years
$10
$150
An unsecured loan up to $55,000 that you can repay early without penalty.

Compare up to 4 providers

Rates last updated April 27th, 2018
Name Product Max. Loan Amount Term of Loan Turnaround Time Costs Fortnightly Repayment $1,500 Product Description
Sunshine Short Term Loans
$2,000
9-15 weeks
30 Minutes - conditions apply
20% of loan amount + 4% of loan amount each month
$396
Apply online with Sunshine Loans and you could borrow up to $2,000 paid directly into your account. Family Business since 1999.
Nimble Short Term Loan
$2,000
62 days to 1 year
1 hour - conditions apply*
20% of loan amount + 4% of loan amount each month
$396
Apply for up to $2,000 and have 62 days to 1 year to repay. Note: Centrelink must not be your primary source of income.
Wallet Wizard Smart Loan (Up to 2K)
$2,000
Up to 2 years
24 hours
47.8% APR
$316.70
Apply for up to $2,000 as a convenient line of credit.
Ferratum Cash Loans
$1,900
up to 6 months
Same Day if approved
20% of borrowed amount + 4% of borrowed amount each month
$396
Ferratum lets you apply for up to $1,900 without a credit check.

Compare up to 4 providers

Rates last updated April 27th, 2018
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
RACV New Car Loans
From 6.49% (fixed)
7.03%
$15,000
1 to 7 years
$0
$380
A competitive rate car loan from RACV with no monthly fees and 5-hour loan approval.
Stratton Finance New Car Loan
From 5.49% (fixed)
6.62%
$18,000
1 to 10 years
$7
$499
Benefit from a car broker with over 25 years experience
MyState Secured Personal Loan
From 7.99% (variable)
8.96%
$10,000
1 to 10 years
$10
$200
Apply for a loan up to $75,000 and benefit from loan terms up to 10 years. Your choice between secured or unsecured.
Bank of Melbourne Secured Car Loan
From 8.49% (fixed)
9.6%
$3,000
1 to 5 years
$12
$195
Apply for up to $80,000 and have your choice of a fixed or variable interest rate.

Compare up to 4 providers

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Personal Loan Offers

Important Information*
NAB Personal Loan Unsecured Fixed

An unsecured personal loan with a competitive fixed rate that you can make additional repayments to without penalty.

SocietyOne Unsecured Personal Loan

Based on your risk profile, you will receive a tailored rate between 7.5% and 20.49% with a SocietyOne personal loan.

Westpac Unsecured Personal Loan

Borrow up to $50,000 for a term of up to 7 years with this unsecured loan.

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