Personal Loan Types: The Explainer

Personal Loan Types: The Explainer

When purchasing goods for your own personal use – car, boat, caravan, motor bike – you may have the choice of either a Personal Secured Loan or an Unsecured Personal Loan.

With a secured loan, the lender uses the goods as security against the loan, while an unsecured loan includes no security. With no security, the interest rate on unsecured loans is usually higher than a comparable secured loan.

Personal Secured Loan

  • Lender uses the goods as security against the loan.
  • Borrower has full use of the goods.
  • Fixed interest rate.
  • Fixed monthly repayments over a fixed loan term.
  • Option available to make additional payments to repay the loan earlier.
  • If loan is paid out in full before the loan term, minimal break fees are charged by the lender.
  • Suitable for purchase of a wide range of consumer goods.

Unsecured Personal Loan

  • No security is provided against the loan.
  • Borrower has full use of the goods.
  • May be fixed or variable interest rates.
  • Fixed monthly repayments over a fixed loan term.
  • Option available to make additional payments to repay the loan earlier.
  • If loan is paid out in full before the loan term, minimal break fees are charged by the lender for fixed interest rate loans and no break fees for variable interest rate loans.
  • The availability of an unsecured loan for certain purchases is subject to individual lender guidelines.

Contact us with your queries. One of our finance brokers can explain each product in more detail and discuss the options that are available for your particular purchase and your credit profile.