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Personal Loan - Credit Builder

  • No ongoing fees
  • Cash in bank account in 60 seconds once contract signed
  • Approval is instant
FixedSecuredN/AMore details

Low Rate Personal Loan (Excellent Credit) (Secured)

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    Secured Green Personal Loan

      VariableSecuredN/AN/AMore details

      Secured Freedom Loan

        VariableSecuredN/AMore details

        Lifestyle Personal Loan - Property Owner

          FixedSecuredN/AN/AMore details

          Secured Fixed Standard Personal Loan

            FixedSecuredN/AMore details

            Secured Personal Loan

              FixedSecuredN/AN/AMore details

              Low Rate Personal Loan (Very Good Credit) (Secured)

                *Comparison rates based on a loan of $30,000 for a five-year loan term. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate, Rates correct as of May 26, 2022. View disclaimer.

                You may need a personal loan for a number of reasons. Whether it’s for home renovations or an expensive trip to the dentist, taking out a personal loan can come in handy when you need a quick cash burst. You will usually be given two options when it comes to personal loans: secured or unsecured.

                Let’s discuss what a secured personal loan is, the pros and cons, costs, and more.

                What is a secured personal loan?

                A personal loan is, in essence, a loan for personal reasons. While a car loan must be used to buy a car, a personal loan can be used for anything from paying for an overseas holiday to a home makeover.

                A secured personal loan requires you to use an asset, such as your car or a term deposit, as security on the loan. This acts as a security blanket for the lender so, in the case you were unable to repay your loan, they have your asset to fall back on to make up for any losses. Typically, you’ll need to take out a secured personal loan if you’re looking to borrow a large sum of money, as lenders like to have this security backing them.

                Secured personal loans can also come with lower interest rates than unsecured loans because of the added security. With this in mind, the lender can have more confidence that you will repay your loan and, if not, that they won’t be majorly out of pocket.

                Pros and cons of secured personal loans

                There are a number of pros and cons that should be considered when weighing up whether to take out a secured personal loan.


                • Often lower interest rate: Secured personal loans often have lower interest rates than unsecured loans because there is less risk of loss for the lender
                • You can borrow more: You can generally borrow more with a secured personal loan
                • Fewer fees: You may also find that secured personal loans have fewer or no fees when compared to unsecured personal loans


                • Your asset is on the line: The biggest obvious con about secured personal loans is that you could stand to lose your asset if you cannot meet your repayments
                • Asset requirements: Depending on what you want to use as your collateral, there may be certain requirements from your lender. For example, if you are using a car as collateral, it may need to be relatively new or worth a certain amount of money
                • Less flexibility: Secured personal loans are generally pretty strict about what you use the funds for. For example, if you took out the loan for home renovations, but they ended up costing less than you thought, you can’t just use the remainder to treat yourself to a holiday.

                Secured vs unsecured personal loans

                Before you decide whether a secured personal loan is right for you, it might be helpful to compare the pair: secured and unsecured personal loans. Given these will be your two main options, it can be helpful to know the differences and which may be most helpful for your situation.

                Secured personal loans Unsecured personal loans
                • Security on the line: You must offer an asset as security
                • Lower interest rates: Interest rates will often be lower
                • Higher loan amounts: You can usually borrow more with a secured personal loan
                • Longer repayment terms: You will likely be given a longer period to pay back your loan
                • Strict: You will need to provide an eligible asset, and spend the money borrowed only on what you borrowed it for
                • No asset required: You don’t need to have an asset as security
                • Higher interest rates: Since you have no security on the loan, your interest rate will likely be higher
                • Lower loan amounts: You may be limited in how much you can borrow
                • Shorter repayment terms: You will likely have a shorter repayment window than with a secured personal loan
                • Flexible: You can usually spend the money more freely

                From this brief comparison, you may find that secured personal loans are better suited for large, one-off purchases - like installing a back deck or the costs of a cosmetic surgery. By knowing exactly how much the goods or services cost, you won’t be left with too much or too little leftover.

                Whereas an unsecured personal loan may be better for a smaller project, like a quick kitchen makeover or an overseas holiday. This way, if there’s any money leftover after you’ve funded your personal endeavour, you can just spend it on whatever you’d like.

                Secured personal loan rates: Fixed vs Variable

                More on secured personal loans and their ‘lower’ rates, you will usually be given two interest rate options: a fixed rate or a variable rate.

                Fixed rates are generally a bit higher than variable rates, but once you have your rate, it will remain the same throughout the duration of your loan. Meaning you know exactly how much your repayments will be each month, and how much interest you will pay back overall. This can be helpful for budgeting and planning reasons.

                On the other hand, variable rates will usually be slightly lower than the fixed rates available. However, variable rates may change throughout the life of your loan depending on the cash rate/market activity. So while it may end up being lower than a fixed rate to begin with, if interest rates hike, you could end up paying more. But if interest rates fall, you will pay even less than the rate you started with. It can be a little less predictable than a fixed rate personal loan, as you don’t know exactly how much you will repay in interest.

                Frequently Asked Questions

                You can definitely pay off a secured personal loan early, however, whether there are break fees involved in doing so will depend on your lender. You will be able to find any information about early repayments or settlements on your loan contract. Otherwise, you can contact your lender to find out.

                Generally speaking, you can borrow anywhere from $2,000 to $50,000 for a personal loan. There are a few lenders that will even offer personal loans of up to $100,000. Each lender is different and your personal situation may affect how much you are able to borrow.

                Again, this will come down to the lender you are borrowing through. But to give you an idea, there are a number of assets people generally use as security:

                • New or used car
                • Home equity
                • Term deposit
                • Other valuable assets (jewellery, high-value art, family heirlooms, etc)

                Depending on how much you are looking to borrow and who you are looking to borrow through, the asset you can offer as security may vary.

                Your lender may not choose to repossess your asset the first time you default on your loan, however, they have the right to. They may let you know beforehand that they will be repossessing your asset, or they may give you a period of time to make up your repayments before they do so.

                If your lender decides to repossess your asset, they must send you a written notice within 14 days informing you of a few things:

                • The estimated value of your asset
                • The cost to repossess it
                • Any other costs
                • Your rights and obligations under the National Consumer Credit Code

                Your lender can’t sell your asset within 21 days of issuing this written notice. So, if you are able to repay your outstanding balance within this time, you may be able to get your asset back. If you can’t do so within the 21 day period, they may sell your asset to recover their losses.


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