Secured loans

When you need a personal loan, for a car, a holiday, a wedding, or any other reason, you’ll get a better deal if you can put up an asset as collateral for a secured loan. Compare some of the great secured loans on offer on this page.

By   |   Verified by David Boyd   |   Updated 20 Jun 2024

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Comparing secured loans for over months

MTF Finance Secured Personal Loan

On website


MTF Finance Secured Personal Loan

Interest rate

From 11.70% (personalised)

Comparison rate

From 0.00% (personalised)

Repayment period

3 years

Application fee


Monthly repayment


Total repayment



  • Be in to win $5,000 cash when you take out a loan before September 1, 2024. Terms and Conditions apply.
  • Borrow between $2,000 to $500,000.
  • Make repayments weekly, fortnightly, or monthly for the term of your loan up to 60 months.
  • Choose Payment Waiver to cover your repayments from an unexpected life event.


  • Quick and easy application process.
  • The rate is fixed for the loan term
  • New Zealand owned.


  • There is a monthly admin fee of $8.24.
ASB Secured Personal Loan

ASB Secured Personal Loan

Interest rate


Comparison rate


Repayment period

3 years

Application fee


Monthly repayment


Total repayment



  • Minimum amount is $20,000.
  • Choose your repayment term, from 6 months to 7 years.
  • Make extra repayments online at any time, with no charges and no fees.
Unity Secured Personal Loan

Unity Secured Personal Loan

Interest rate

From 9.90% (personalised)

Comparison rate

From 0.00% (personalised)

Repayment period

3 years

Application fee


Monthly repayment


Total repayment



  • Fast and easy online application.
  • A personal loan from $2,000 up to $60,000 is payable for up to 7 years.
  • Get an interest rate as low as 9.90% p.a. depending on your affordability and credit score.
Harmoney Secured Personal Loan (3, 5 or 7 year loan term)

Harmoney Secured Personal Loan (3, 5 or 7 year loan term)

Interest rate

From 9.89% (personalised)

Comparison rate

From 0.00% (personalised)

Repayment period

3 years

Application fee


Monthly repayment


Total repayment



  • Rates start from 9.89% — 21.49% p.a. based on your credit assessment.
  • Your rate is fixed for the life of the loan.
  • Flexible repayment options - Weekly, fortnightly, or monthly.
  • No early repayment fee.

A secured personal loan is one that is guaranteed by collateral in the form of personal assets you own. Lenders can take possession of these assets in order to recover their funds if the borrower defaults on the loan. This acts as an incentive to the borrower to repay their loan on time. As a result of having this security, lenders can provide lower interest rates to borrowers on secured loans.

Types of secured personal loans

  • Home loan or mortgage. Under this type of loan, lenders take a charge over a borrower's home or other property as collateral. If a borrower defaults on a loan or consistently fails to make monthly repayments, the home may go into foreclosure. The two main types of mortgage loans are lump-sum home loans and home equity lines of credit.
  • Car or other vehicle loans. This is one of the most common loan types individuals or small business owners use. Cars, motorcycles, and boats may be offered as collateral. Similar to mortgage loans, failure to repay a secured loan can cause your vehicle to be repossessed by your lender.
  • Home renovation loan. To increase the value of your home you might want to upgrade its existing rooms or create additional landscaping (such as a swimming pool or garden). However, not every prospective homeowner will find themselves in the appropriate financial situation to renovate a home. To achieve your home renovation goals at lower interest rates, considering a secured loan is your best option. In this case, the home in question may be used as collateral.
  • Loans for other purposes. Secured personal loans can be used to finance almost any other purpose of your choice, including holidays, weddings, education, and debt consolidation. Although these types of loans are typically offered as unsecured loans, you may be able to get a lower interest rate by offering security.

When to consider a secured personal loan

Because you put yourself at risk of losing your property or vehicle under a secured personal loan, you may be wondering why borrowers choose to get them in the first place as opposed to a standard personal loan. If you find yourself in a financial situation similar to any of the ones listed below, you may be better off applying for a secured personal loan rather than an unsecured personal loan:

  • Bad credit. If you don't qualify for an unsecured personal loan because of your credit score or lack of credit history, you may still be eligible for a secured loan. You may even use this loan to improve your credit score by paying off multiple debts and bills using a debt consolidation loan. There are lenders for people with bad credit, but there are important things to consider.
  • High debt-to-income ratio. Similar to the previously mentioned circumstance, you can still qualify for a secured personal loan even with a high debt-to-income ratio. Your debt-to-income ratio is calculated by dividing your total monthly debt payments by your gross monthly income, then multiplying the result by 100 to arrive at a percentage. Borrowers normally want to see a debt-to-income ratio of less than 40% before they will advance further loan funds.
  • Higher loan amount. If you need to borrow a particularly large amount, a secured personal loan may give you more options.

Features to check when comparing secured personal loans

When applying for this type of loan, you'll most likely source the product from a bank, online lender or credit union. The interest rate you are offered will depend to some extent on the lender you work with, along with a review of your credit history and an appraisal of the proposed collateral, but you should also consider the following important factors:

  • Loan terms. Secured loans are suitable for those who need a longer amount of time to pay off their loan. If you're capable of repaying your loan over a shorter period, keep in mind that though you can leverage a lower interest rate, you'll likely have to satisfy higher monthly payments.
  • Collateral assets. You can't just offer any item as collateral. In some cases, for example, one lender may only accept real estate or a paid-off vehicle , whereas others may be more flexible and accept a savings account.
  • Associated fees. As with any type of loan, note that you won't just be paying interest. There may be additional fees attached, such as an application fee, a charge for appraisal of the offered collateral, and ongoing monthly or annual fees for loan account administration.
  • Comparison rate. To determine the true cost of your loan, ask your lender to provide a secured personal loan comparison rate. A comparison rate comprises of the interest rate of your loan along with other related charges. However, a comparison rate won't include every fee you may be charged (such as late payment fees) so it won't always reflect the final, most accurate cost of your loan. Instead, comparison rates make for an excellent guideline for possible costs.

Assets acceptable as secured personal loan collateral

To guarantee that the loan is repaid, lenders must ensure that your collateral is valuable enough to encourage you to meet monthly repayments on time and thus avoid repossession. Lenders may therefore make an appraisal of the collateral you offer before approving your loan application. Though they hold a legal interest in your asset, it will remain under your physical control (unless you default on your loan and the asset is repossessed). Here is a list of the assets you can use as collateral:

  • Real estate property. This may be a house, land, an apartment, or commercial property. There may be an existing mortgage on the property, but if you have substantial equity in it, the lender may be prepared to take security in the form of a second mortgage.
  • Vehicles. If you own a car, boat, truck, motorcycle, or other means of transportation, you can use this asset as collateral. In most cases, lenders may require you to have comprehensive insurance coverage to protect the vehicle.
  • Shares. Investments in shares, debentures and other financial instruments may be accepted as security.
  • Cash deposits. A good balance in a bank savings account or term deposit could be used to secure your loan. Just bear in mind that the interest rate you pay on your loan will almost certainly be higher than the rate you are receiving on your deposit.
  • High-value items. If you own a product of larger significance such as jewelry, artwork, and collectibles, these can count as collateral.

Secured personal loans vs unsecured personal loans

Though an unsecured personal loan may seem preferable because the lender doesn't hold any rights over your property or assets should you default on your loan, there are several advantages secured personal loans have those unsecured ones don't. These include the following.

  • Collateral. The most obvious difference between secured loans and unsecured loans is the demand of the former for collateral. By putting up valuable assets to secure your loan, you are more likely to have your loan application approved.
  • Risk. While lenders absorb less risk than you do, putting up collateral tends to encourage borrowers of this type of personal loan to make their repayments on time.
  • Interest rate. Secured loans have lower interest rates than unsecured personal loans.
  • Repayment period. Unsecured loans cater to longer repayment periods. This is because some types of property can appreciate in value, which adds to the collateral of the loan as it is repaid. However, early repayment can incur penalty fees.

Learn about secured loans

Find out what a secured loan is, what to look out for, and how to use them.

  • FAQs

  • Pros & cons

  • Tips

Are there any extra costs associated with a secured loan, versus an unsecured loan?

Possibly. Although you are unlikely to be charged a fee for a professional valuation of your asset if you are buying a new car and offering it as security, other types of security may need to be valued, and the lender will most likely pass on this valuation fee to be paid by the borrower.

How does the collateral, or charge against the borrower’s asset, give security to the lender?

Because the charge against the borrower’s asset gives the lender the opportunity to take possession of the asset (possibly via court proceedings) and sell it. The lender is then allowed to deduct from the sale proceeds any remaining unpaid loan principal, plus any interest owing, plus the lender’s costs for the debt recovery process. If any funds remain after all these amounts have been deducted, the balance is returned to the borrower.

In addition, the charge over your asset gives the lender some assurance that you will do whatever it takes to repay your loan rather than risk losing your asset.

How much can I borrow with a secured loan?

It will depend on four main factors:

  • Your credit score (i.e. the higher your score, the higher the amount you are likely to be able to borrow).
  • Your income (because lenders need to be able to see that you can afford the repayments).
  • The amount of any debt you already have (such as credit card debt, other personal loans or a home loan).
  • The value of the asset you can offer as security.

What are the benefits of a secured loan?

There are four main benefits:

  • Secured loan applications are more likely to be successful than unsecured loans applications, simply because the borrower sees a secured loan as less risky.
  • Secured loans tend to have lower interest rates than unsecured loans.
  • Secured loans tend to have lower fees than unsecured loans.
  • Secured loans tend to have higher available amounts and longer loan terms than unsecured loans.

What are the risks of a secured loan?

The obvious risk is the potential to lose ownership of the asset you offered as security. But while having a charge placed over your asset sounds scary, it will not be a problem provided you keep up with your loan repayments. A borrower will not try to take possession of your asset simply because you are slightly late with your repayments, although you should aim to always pay on time in order to protect your credit score.

Repossession of your asset is only likely to be the lender’s last resort if you are in serious default and have made no attempt to either repay your remaining loan amount or come to another arrangement with the lender. There are strict rules, which the lender must observe, governing outstanding loan amounts and notice periods.

But be aware that defaulting on any kind of loan will seriously damage your credit score, regardless of whether the loan is secured or unsecured.

What can a secured loan be used for?

The choice is yours. You can buy a car, a motorcycle or a boat, fund a holiday or a wedding, renovate your home, cover your education expenses or consolidate your debts. As long as you have an eligible asset to secure the loan, how you spend the loan funds is up to you.

What happens to the charge over my asset after I have fully repaid the loan?

The lender must remove the charge over your asset. You will then have unencumbered ownership of your asset.

What is a secured loan?

It’s a type of personal loan where the borrower gives a form of collateral to the lender. This means that the lender places a charge on an asset, such as a car or a house, owned by the borrower, giving the lender security that either the loan will be repaid in full, or that the principal and costs can be recovered by selling the asset if the borrower defaults on the loan.

What kind of asset can be offered as security?

The asset used as security is often the item that the borrower intends to purchase with the loan funds. This will typically be the case with a secured car loan, where the lender takes a charge over the car being purchased with the loan funds. However, the asset offered a security could be something else, such as another car, or real estate, an amount in a bank deposit account, a share investment portfolio, or, less often, a boat, jewellery or a work of art.

If you are offering a car as security, it will usually need to be less than five years old at the beginning of the loan period, and some lenders may have even stricter vehicle age limitations. You will also need to pay for comprehensive insurance on the car.

What kind of interest rates are available on a secured loan?

Both fixed and variable interest rates are available.

A fixed interest rate will not change during the loan period, so your regular repayment amount will always be the same.

A variable interest rate will usually be lower than a comparable fixed rate at the start of the loan, but it could go either up or down at any time (usually in response to a change in the Reserve Bank’s cash rate), meaning that your periodic repayment amount could increase or decrease.

Lower interest rates

Interest rates for secured loans are indisputably lower than rates for unsecured loans. Because secured loans are backed by collateral, they pose a lower risk for lenders. When lenders take on less of a gamble, they can offer loans at a much lower interest rate.

Rebuilding of credit

Most personal loans are granted to those who boast good credit scores. However, secured loans are easier to get than unsecured ones if your score is low, and can also be a means of strengthening it. By successfully repaying your secured loan in full and on schedule, you can enhance your credit rating.

More borrowing options

Loans secured by collateral usually offer longer terms and higher loan amounts, which opens up the range of options available.

Longer borrowing periods

Many borrowers opt for secured loans because of the longer repayment terms. A longer term means that monthly repayments will be lower, although your interest costs will be greater in total.

Lower fees

Yet another benefit of the lender's reduced risk is that fees attached to a secured loan are likely to be lower than those for unsecured loans.

Repossession of property or loss of assets

The greatest risk attached to secured personal loans is potentially losing your property. If you miss several monthly payments, your lender could take legal action to seize the property on which the loan is secured.

Damage to credit score

Though you won't need particularly good credit to qualify for a secured loan, defaulting on your loan can negatively impact your credit rating and ability to take out a loan in the future.

Potential for higher interest rates

You may not get the interest rate initially advertised if your credit score is lower than ideal.

Consequences for early repayment

As with most personal loans, repaying your loan balance before your term is over can cost you early repayment fees, which scale up according to the amount you borrow. Some lenders, however, will allow you to make partial overpayments, or even total early repayment, without incurring a penalty.

Not ideal for debt consolidation

Though using a personal loan for credit card debt consolidation may seem like a reasonable financial decision, you end up moving unsecured debt over to secured debt. This means putting more collateral at risk to pay for debts you couldn't afford to service in the first place.

Clean up your credit history before you apply

Though you can qualify for this type of loan product with a bad or non-existent credit rating, having a good credit score can increase your chances of borrowing more money at a lower interest rate. To improve your credit score, start by ordering a free copy of your credit report from a New Zealand credit bureau, and then ask them to remove any errors you find. Aim to pay all your bills on time and in full, to avoid having any negative information in your credit history file.

Prioritise what you really need

Because of the risk involved in using a secured loan, it's best to keep your eyes on the prize. Reduce other payments if you can, and try to stick with one loan at a time, to reduce your debt-to-income ratio so that your application is more likely to be approved.

Know what makes good collateral

The best types of assets to use as collateral are ones with a title of ownership such as a home or vehicle. Because banks are mostly conservative about valuing an asset themselves, keeping a detailed record of your assets' worth as part of your personal balance sheet can put a lender's mind at ease. You can easily compile this with an independent appraiser.

Explore all your options

It's important that you explore all the loan options available to you. This means checking what each lender is offering in the way of loan terms, amounts, comparison interest rates, any additional fees that may not be included in the comparison rate, whether there are any early repayment penalties, and what kind of assets are accepted as security.