types-of-loans

Types of personal loans

Rates and fees last updated on

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.

$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Repayment Product Description
Latitude Personal Loans (Unsecured)
From 13.99% (fixed)
15.2%
$3,000
2 to 7 years
$250 (Loans under $4000 - $140)
An unsecured loan designed for multiple purposes – renovating, buying a car or travelling. Funds can be in your count in as little as 24 hours.
CUA Discount Fixed Personal Loan (Loans over $30,000)
From 10.99% (fixed)
10.99%
$30,000
1 to 7 years
$0
Take advantage of a competitive fixed rate and no monthly fees when you borrow over $30,000
St.George Get Set Loan Personal Loan
From 17% (variable)
$5,000
$150
A revolving line of credit that lets you access your funds as and when you need to.
Bank of Melbourne Unsecured Personal Loan
From 12.99% (variable)
13.87%
$3,000
1 to 7 years
$195
An unsecured personal loan that gives you a choice between a fixed or variable rate.
BankSA Unsecured Personal Loan
From 12.99% (variable)
13.87%
$3,000
1 to 7 years
$195
BankSA allows you to borrow up to $40,000 with your choice of a fixed or variable rate.

Compare up to 4 providers

Name Product Max. Loan Amount Term of Loan Turnaround Time Costs Product Description
Sunshine Short Term Loans
$2,000
9 weeks
30 Minutes - conditions apply
20% of loan amount + 4% of loan amount each month
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
Apply for a short term loan and you could borrow up to $2,000
Ferratum Cash Loans
$1,900
Up to 6 mths
Same Day if approved
20% of borrowed amount + 4% of borrowed amount each month
A small loan from Ferratum lets you borrow up to $1,900 without a credit check
Cash Train Loans
$2,000
10 weeks or 3 months
1 Business Day
20% of principal amount (establishment fee) + 4% monthly charge
Apply for a Cash Train loan and get up to $2,000 sent straight to your bank account. Fast online application

Compare up to 4 providers

$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Repayment Product Description
CUA Fixed Rate Car Loan
From 6.79% (fixed)
6.92%
$15,000
1 to 7 years
$0
A competitive car loan that offers flexible repayment options and no account keeping fees.
RACV Car Loans
From 7.49% (fixed)
8.03%
$15,000
1 to 7 years
$378
Enjoy this fixed rate new car loan offer from RACV. No ongoing fees.
Latitude Personal Loan (Secured)
From 12.99% (fixed)
14.2%
$3,000
2 to 7 years
$250 (Loans under $4000 - $140)
Can be used for whatever purpose: renovating, buying a car, booking a holiday. Funds can be in your account in as little as 24 hours.
Bank Australia Car Loan
From 6.45% (fixed)
6.66%
7 years
$150
A competitive rate and the ability to offset your car’s carbon emissions for the loan term.
Loans.com.au - New Car Loan
From 5.44% (fixed)
5.99%
$5,000
3 to 5 years
$400
This car loan is for new cars and offers a low fixed rate and no ongoing fees.
Bank of Melbourne Secured Car Loan
From 8.49% (fixed)
9.39%
$3,000
1 to 5 years
$195
A low rate personal loan from Bank of Melbourne with variable or fixed option.
BankSA Fixed Rate Car Loan
From 8.49% (fixed)
9.39%
$3,000
1 to 5 years
$195
Apply for a fixed rate car loan from multi-award winning BankSA.

Compare up to 4 providers

Picture: Shutterstock

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Related Posts

Citi Personal Loan Plus

Borrow up to $75,000. All approved applicants will receive the advertised variable rate of 11.99% p.a.

Latitude Personal Loan (Secured)

Can be used for whatever purpose: renovating, buying a car, booking a holiday. Funds can be in your account in as little as 24 hours.

CUA Discount Variable Personal Loan (Loans over $30,000)

Apply for a loan over $30,000 and enjoy a discounted interest rate

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