Unsecured personal loans

Looking for an unsecured personal loan because you don’t have collateral to offer, or you’d rather not have a charge placed over your asset? You can compare unsecured loan offers from a range of lenders right here on this page.

By   |   Verified by David Boyd   |   Updated 30th October 2020

Comparing unsecured personal loans for $30,000.00 over 60 months

ANZ Variable Rate Personal Loan

On ANZ's website

Apply by 02 December 2020Last clicked an hour ago

ANZ Variable Rate Personal Loan

Interest rate

12.99%

Comparison rate

13.86%

Repayment period

5 years

Application fee

$150.00

Monthly repayment

$685.85

Total repayment

$41,151.00

Highlights

  • For a limited time only, ANZ has reduced their variable interest rate to 12.99% p.a. (eligibility criteria and terms and conditions apply).
  • Get up to 7 years maximum repayment period.
  • Log on to ANZ Internet Banking to see your balance, repayments, interest paid, and details about your next payment.
ANZ Fixed Rate Personal Loan

On ANZ's website

Apply by 02 December 2020

ANZ Fixed Rate Personal Loan

Interest rate

10.50%

Comparison rate

11.38%

Repayment period

5 years

Application fee

$150.00

Monthly repayment

$648.04

Total repayment

$38,882.40

Highlights

  • For a limited time only, ANZ has reduced their fixed interest rate to 10.50% p.a. (eligibility criteria and terms and conditions apply).
  • Get up to 7 years maximum repayment period.
  • Log on to ANZ Internet Banking to see your balance, repayments, interest paid, and details about your next payment.
NAB Variable Rate Personal Loan

On NAB's website

NAB Variable Rate Personal Loan

Interest rate

From 9.99% (personalised)

Comparison rate

From 10.88% (personalised)

Repayment period

5 years

Application fee

$150.00

Monthly repayment

$640.45

Total repayment

$38,427.00

Highlights

  • Get a variable headline rate of 12.69% p.a.* (for new loans only). The interest rate you get may be different depending on your circumstance.
  • 13.56% p.a. variable comparison rate.
  • With redraw facility.
  • 1-7 years flexible loan term.
  • Borrow from $5,000 up to $55,000.

*The variable headline rate is what the majority of personal loan customers will get or lower.

NAB Fixed Rate Personal Loan

On NAB's website

NAB Fixed Rate Personal Loan

Interest rate

From 9.99% (personalised)

Comparison rate

From 10.88% (personalised)

Repayment period

5 years

Application fee

$150.00

Monthly repayment

$640.45

Total repayment

$38,427.00

Highlights

  • Get a fixed headline rate of 12.69% p.a.* (for new loans only). The interest rate you get may be different depending on your circumstance.
  • 13.56% p.a. fixed comparison rate.
  • 1-7 years flexible loan term.
  • Borrow from $5,000 up to $55,000.
  • Flexible weekly, fortnightly or monthly repayments.


*The fixed headline rate is what the majority of personal loan customers will get or lower.

Harmoney Unsecured Personal Loan (5 Year Loan Term)

On Harmoney's website

Harmoney Unsecured Personal Loan (5 Year Loan Term)

Interest rate

From 6.99% (personalised)

Comparison rate

From 7.79% (personalised)

Repayment period

5 years

Application fee

From $295.00

Monthly repayment

$599.73

Total repayment

$35,983.80

Highlights

  • Personal Loans up to $50,000
  • No early repayment fees
  • Apply online in minutes
MoneyMe Personal Loan - Excellent Credit Rating

On MoneyMe's website

MoneyMe Personal Loan - Excellent Credit Rating

Interest rate

From 8.99% (personalised)

Comparison rate

From 10.68% (personalised)

Repayment period

5 years

Application fee

From $200.00

Monthly repayment

$626.76

Total repayment

$37,605.60

Highlights

  • Easy application for up to $50,000 online, no paperwork required
  • MoneyMe's smart tech gives you an outcome on the spot
  • Funds hit your bank account in as little as minutes (transfer times may vary depending on your bank)
  • Flexible repayment options
  • No monthly charges, early exit fees or funky hidden costs
Plenti Personal Loan: Excellent Credit (Fixed)

On Plenti's website

Plenti Personal Loan: Excellent Credit (Fixed)

Interest rate

From 6.49% (personalised)

Comparison rate

From 6.84% (personalised)

Repayment period

5 years

Application fee

From $149.00

Monthly repayment

$589.76

Total repayment

$35,385.60

Highlights

  • Enjoy a low rate that is 100% made for you.
  • Apply online in under 10 minutes with your driver’s licence and bank details. Enjoy no monthly or early repayment fees.
Symple Personal Loans

On Symple Loans' website

Symple Personal Loans

Interest rate

From 5.75% (personalised)

Comparison rate

From 6.47% (personalised)

Repayment period

5 years

Application fee

From $0.00

Monthly repayment

$576.50

Total repayment

$34,590.00

Highlights

  • Personalised Interest Rates.
  • No early repayments fees.
  • Loan amounts from $5,000 up to $50,000.
  • Loan terms from 1 year to 7 years.
  • Fast, flexible and fair Personal Loans.

Overview

Rather than putting off a major life event like your wedding, honeymoon, education or home renovation, a personal loan can help you achieve these milestones sooner. And when it comes to sudden expenses like emergency home repairs or unexpected medical bills, personal loans can help you stay on top of things.

There are two types of personal loans – secured and unsecured. Choosing between the two is just a matter of deciding which one is right for you and your current financial situation. Read on to get a better understanding of unsecured personal loans, and how this choice could potentially help you. 

The difference between unsecured and secured personal loans

To help you understand unsecured personal loans, we need to talk about secured personal loans first. To get a secured loan, a borrower must pledge an asset they own as collateral or security. In the event that the borrower is unable to finish paying their loan, the lender has the right to take legal action to repossess the asset. Car loans and home loans are two of the most common kinds of secured loans, with borrowers pledging their newly purchased vehicles and homes as security.

Conversely, unsecured personal loans require no such security. You simply take out a loan and promise to repay your lender the full loan amount within the set loan term. However, because lenders don't have any security, they need to offset some of the risk involved with lending out such a large sum of money. As a result, interest rates for unsecured loans are typically higher than the rates for secured ones. The maximum loan amount is also more likely to be lower than the average secured loan.

On top of this, lenders are also more stringent about borrowers' credit ratings. If you've got bad credit, you'll have a harder time pinning down an unsecured loan. Why? Think of your credit rating as a snapshot of your financial behaviour. A high score indicates that you pay your debts on time and aren't trigger-happy with your credit card, and that's the kind of person a lender can trust their money with. Check your credit rating before applying.

Types of unsecured loans

An unsecured personal loan can either come in the form of a term loan or a revolving loan. The former is characterised by a set loan amount to be paid over a set loan term. Usually, the borrower agrees to pay the loan amount in equal instalments until the amount is fully paid or the term has reached its end.

On the other hand, a revolving loan is more flexible. Instead of setting a fixed amount to be loaned, the lender sets a maximum amount that can be borrowed. The borrower can then dip into the revolving loan to borrow money whenever they need it, then repay their debts on an agreed schedule. If this sounds familiar, it's because this is how credit cards and personal lines of credit work. So in essence, a credit card is a type of unsecured loan.

There is another type of unsecured personal loan called a debt consolidation loan. When someone struggles to juggle too many debts at a time, they can make their lives easier by opting to consolidate their loans. That is, to roll all their loans into one account. In effect, they only have to repay one loan amount and one interest rate, as well as owe money to only one lender.

Cost of unsecured loans

While the higher interest rates for unsecured loans (because of the lender's higher risk) are a major factor to consider, you'll also want to take a careful look at the fees involved. Once again, the higher risk level may have an impact on the size of the fees, which can include:

  • Application fee. While some lenders don't charge an application fee, others may charge a fee of between $50 and $500, or more. In most cases, however, this is more properly described as a loan establishment fee, and will be charged upfront once your loan is approved.
  • Ongoing account administration fee. Account-keeping fees may be charged monthly (e.g. $10) or annually (e.g. $100), but once again, some loans may not have these fees.
  • Late payment fee. If you fail to make your monthly repayment on time you could be charged a flat fee, typically around $20. Avoid this fee by setting up a direct debit from your bank transaction account to make your loan repayments.
  • Early repayment fee or break fee. The interest rate you are given takes into account the profit the lender expects to make from the loan. If you repay the loan before the end of the agreed term, or make extra repayments, some lenders may charge a penalty fee to compensate for their lost profit.

The effective cost of some of these fees, but not necessarily all of them, may be included in the comparison interest rate, shown alongside the advertised interest rate.

Learn about unsecured person loans

Find out what a secured personal loan is, how they work, and how you can use them.

  • Pros & cons

  • Tips

  • FAQs

  • Glossary

There is no risk of losing your assets

Not everyone is capable of providing security for their loans. Some people may already be using their homes or vehicles for existing loans, some may not have anything of adequate value, and others might not be comfortable enough to put valuable property on the line. If an emergency or a totally unexpected expense eats up your savings, lenders might not be as understanding as you'd hope. But with an unsecured loan, you don't have to deal with that kind of pressure.

No need to have assets appraised

While your credit score and spending habits won't make as much of an impact in a secured loan application, you will have to go through some kind of appraisal process for the asset you're pledging as collateral. Acceptable assets range from cars and houses to investment portfolios and jewellery. You'll need to prove to your lender that your asset is valuable enough to guarantee repayment, and you'll require the help of an appraiser for this.

The appraiser will do a thorough inspection of your property and compare it to other existing models or similar properties of similar value. Not only does this take a bit of time, it'll cost you a little extra too. But if your loan is unsecured, you avoid this process and its cost.

It helps improve your credit rating

Variety in your credit mix – that is, the diversity of your debt and payment history – can make a positive impact on your credit rating. Remember there are different types of loans. If you have a credit card (revolving loan), a car loan (secured term loan), and an education loan (unsecured term loan), you already have three different kinds of loans in your mix.

Besides adding variety to your credit mix, an unsecured loan can also help you build a positive payment history. As long as you make your monthly payments on time and avoid penalties, you boost your credit score with each timely payment.

Higher interest rates

As mentioned before, an unsecured loan will probably have a higher interest rate than secured loans of the same or similar value. This is because lenders want to minimise risk, and without a security, they stand to lose a lot should their borrowers default. High interest rates cushion the blow for lenders.

Note that a high interest rate doesn't necessarily equate to a high comparison rate. On top of the interest rate, the comparison rate also accounts for fees and charges. So a loan with a high interest rate and low fees and charges can have the same or even lower comparison rate than a loan with a low interest rate but high fees and charges.

You'll need a reasonable credit score to qualify

Again, this is about lenders wanting to minimise risks. Your creditworthiness is determined by your past financial behaviour and your ability to pay back debts on time. Fail to pay on time, or worse, default on a loan, and your credit rating will suffer. With a rating on the lower end, you'll just look like a red flag for late payments and overall hassle to lenders. And with no security, you don't have much else to offer a lender to earn their trust.

Lenders can take legal action against you if you fail to pay

Most unsecured loan agreements stipulate that in the event a borrower fails to pay their loan, lenders can take borrowers to court. If a judgment is made against you, you could face even more financial troubles. You may be required to pay for the legal costs the lender incurred in the process of suing. A judgment made against you also makes a big impact on your credit rating, jeopardising your chances of securing another loan anytime soon.

Preparing for an unsecured personal loan

Before you start sifting through the myriad of unsecured personal loan options online, consider crossing these five items off your to-do list first:

  • Build your credit score. Remember, a lender is less likely to offer you an unsecured personal loan if you have a low credit score. They want assurance that you're a financially responsible person who can pay on time, and your credit score is one way to assess that. There are several factors that contribute to a good credit score, with paying debts on time being a major one. And while early repayment on certain term loans might cost you a penalty fee, doing so for a credit card frees up your credit, improves your credit score and potentially lowers your interest rate. So check your credit score, and also get a free copy of your credit report from a credit bureau so that you can have any errors fixed.
  • Prepare the necessary documents. Most lenders won't offer an unsecured personal loan without going over their borrowers' financial documents. Aside from your credit report, you should also prepare copies of your most recent payslips, credit card bills and bank statements. You're also likely be asked for proof of identification and proof of residence. Birth certificates, drivers licences, passports, and visas work for the former, while utility bills, mortgage agreements or rental contracts work for the latter.
  • Review your lender options.Typically, you'll have four options for lenders – major banks, lesser banks and credit unions, peer-to-peer lenders and other non-bank lenders. Make sure your lender is legitimate, has a solid online presence, fair policies, and decent customer service. Go over reviews online and inquire with friends who've taken out loans at any lenders you're interested in too. Bottom line: you're looking for a lender that is fair, communicates their services well, and values their customers.
  • Compare secured personal loans vs unsecured ones. Perhaps you need a higher loan amount with a low interest rate – something that'll get you out of a bind fast, but won't have you struggling to meet monthly repayments. In that case, you might need a secured loan. Try to be flexible when considering your options, and compare secured loans with unsecured loans from different lenders. Don't forget to look into the different rates and fees in each loan too. Compare the interest rate, loan term, and comparison rate among different loans. And don't overlook additional feels like application fees, monthly account-keeping fees, late payment fees and early repayment fees.
  • Consider getting pre-approved. A loan pre-approval is an estimate you can request from your lender that helps you get a ballpark figure on the amount you can borrow. The estimate is based on factors like your income and your spending habits, as well as your assets and liabilities. With your pre-approval estimate, you can assess your finances and work out if you're capable of repaying your loan within the terms offered.

Features to look out for

Make sure your lender can give you options when it comes to your loan term. You may be given a choice between weekly, fortnightly, or monthly repayments. Try to choose a term that lines up with your payroll dates and doesn't coincide with your due dates on rent, credit card bills, and other loans.

Another feature to look for is an early repayment option. Some lenders penalise their borrowers for early repayment, so be sure to check your lender's policy. Early repayment options help you pay off your loans faster without incurring huge penalty fees.

Lastly, look for lenders with redraw facilities. This means that if you do make extra repayments, you'll be allowed to take a portion of them back later if you need some cash. In a tight spot, redraw facilities can come in handy.

Beware of additional fees

Your loan amount, interest rate, and comparison rate aren't the only numbers you should be concerned with. There are quite a few fees that shock first-time loan applicants. Here are a few of those fees that you might encounter:

  • Upfront fees. Also called application fees. Lenders may charge you between $50 and $500 for the application process. This isn't always the case, though. You may come across lenders with special discounts or promos for applying, so don't forget to ask about this when you inquire at different banks and lenders.
  • Account-keeping fee. A monthly or annual fee charged for account administration.
  • Late fees. This is a penalty for paying past your due date, typically a flat fee of $20.
  • Early repayment fees. Some lenders discourage early repayment and impose a hefty fee on anyone who tries to pay ahead of their loan term's end.

Consider getting a co-signer

If you're not very confident about your credit rating, you can always opt for the help of a co-signer. A co-signer is someone who applies alongside you, and effectively agrees to cover your loan repayment in the event that you cannot continue to do so. A co-signer is usually someone you know and trust (e.g. your parent), who has good credit, and who can cover for you when you're in the red.

Can I get an unsecured personal loan if I have a very low credit score?

It’s possible, but it may be very difficult, and the interest rate is likely to be high and the amount you can borrow quite low. If you have a low credit score and you need an unsecured personal loan, it would be a good idea to concentrate on improving your credit score first.

How long does it take to get an unsecured loan?

It should take about 10 minutes to complete the online application form if you have all your information (ID documents and proof of income) to hand. You may get conditional approval (i.e. conditional on verifying your information and credit score) in a matter of minutes. The final approval process can take as little as 24 hours, sometimes less.

How much can I borrow with an unsecured loan?

Most unsecured personal loans fall into the range $2,000 to $70,000. but the amount you can borrow will depend on:

  • Your financial situation — your income and expenses, and any other debts you already have
  • Your credit score, based on your credit history

Should I apply for several loans at once, to improve my chances of getting an application approved?

No, that’s not a good idea. Every loan application you make will be recorded in your credit history and reduce your credit score, so check your credit score first and then apply for a single loan that you can realistically expect to be approved for. Only make a second application if your first application is refused, and avoid making multiple applications. If you get knocked back continually, you probably need to lower your expectations about the amount you can borrow and/or improve your credit score.

What are the advantages of an unsecured loan?

If a lender takes a charge over your asset in order to provide security against a loan, you risk losing that asset if you default on your loan repayments. That’s because, in the case of a default, the lender has a right to take possession of your asset and sell it, using the proceeds to recover the unpaid loan principal plus interest owing and other costs.

But with an unsecured loan, no charge has been taken over your asset, so you are not at risk of losing it.

What are the disadvantages of an unsecured loan?

There are a couple of downsides to an unsecured loan.

Firstly, because lenders view unsecured loans as a more risky proposition than secured loans, it can be more difficult to have an unsecured loan application approved. However, if you have a good credit rating and an income sufficient to service the proposed loan, your application will be more likely to succeed.

Secondly, and once again because of the perceived higher risk, unsecured loans tend to have higher interest rates and fees than secured loans, and may have lower borrowing amounts.

What can an unsecured loan be used for?

You can use an unsecured personal loan for almost any purpose — for example, travel, a wedding, home renovations, debt consolidation, education expenses — but if you want to buy a car the lender may steer you in the direction of a secured loan, with the car you intend to buy being used as collateral. However, you can still use an unsecured loan to buy a car.

What features should I look for in an unsecured loan?

As well as comparing interest rates (including the comparison interest rate, which takes into account the effect of standard loan fees) the following features may be important to you:

  • A choice of weekly, fortnightly or monthly repayments.
  • The ability to make extra repayments whenever you like, so that you can repay your loan earlier. (This feature may not be available without a penalty fee if you choose a fixed interest rate loan.)
  • A redraw facility if you decide that you need to access the cash you used for making extra repayments.

What happens if I don’t repay an unsecured loan?

Although the lender has no security over any of your assets, legal action can still be taken against you in order to recover the debt. And this would do serious damage to your credit score.

What is an unsecured loan?

It’s a type of personal loan that does not require the borrower to provide any collateral. It’s different from a secured loan, where the lender takes a charge over an asset (such as a house or car) owned by the borrower in order to reduce the lender’s risk.

What is the repayment period for an unsecured loan?

You can usually choose a repayment term of between one and seven years.

What kind of fees are charged for an unsecured loan?

You may have to pay the following fees:

  • Application fee — payable for successful applications, although not all lenders charge an application fee
  • Monthly or annual account-keeping/admin fee, but not all lenders charge this fee

You may also have to pay an early repayment fee if you repay a fixed interest loan before the end of the agreed loan term, although once again this is not always the case.

What type of interest rate do unsecured loans have?

Both fixed and variable interest rate unsecured loans are available.

Appraisal

To appraise something is to determine its value. When applying for a secured personal loan, a lender usually requires an authorised appraiser to assess the value of an asset before it can be pledged as collateral. This method usually involves comparing the asset's market value with similar properties or items.

Asset

An asset is an item or a property of value that can be pledged by a borrower as collateral for a secured personal loan. As collateral, the asset can be repossessed should the borrower default on their loan. For example, if a borrower were to take out a car loan, they would pledge the new vehicle as a collateral.

Collateral

Also called a "security", a collateral is any asset that a borrower pledges to a lender when applying for a secured personal loan. Having a security gives lenders greater assurance that the borrower will work towards paying off their loan. Otherwise, if the borrower defaults on their loan, the lender can repossess the collateral to earn back what they lost.

Comparison rate

A comparison rate is often said to reflect the true annual value of a personal loan. Aside from the loan amount, the comparison rate accounts for the interest rate, application fees, processing fees, and usually any other unavoidable fees and charges. The comparison rate is then spread over the total loan term and is expressed as a percentage. The comparison rate only applies to loans on a fixed term.

The term "comparison rate" is often used interchangeably with the term APR or annual percentage rate.

Credit mix

Credit mix refers to the variety of borrowings appearing in a person's credit report. Ideally, you want to have a good credit mix of different types of loans.

Credit rating or credit score

A credit rating is a number that represents a person's financial history and current creditworthiness. A credit score is influenced by factors like credit mix, debt history, early and late repayment history, defaults and court judgments.

Default

Defaulting on a personal loan means being more than 60 days overdue for a total repayment amount of at least $150.

Redraw facility

This is an option to withdraw money from any extra repayments you have made on a personal loan.

Repossession

When an asset is repossessed, it's taken away by a bank or a lender to recoup funds from a defaulted secured loan.