Unsecured personal loans

Compare unsecured personal loans that are not secured against your own property. Use the funds to fund a large purchase like home renovation work, debt consolidation, wedding expenses, and much more.

By   |   Verified by David Boyd   |   Updated 28 Sep 2022

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Comparing unsecured personal loans for over months

Harmoney Unsecured Personal Loan (3 Year Loan Term,  $5000-$50,000)

Harmoney Unsecured Personal Loan (3 Year Loan Term, $5000-$50,000)

Interest rate

From 6.99% (personalised)

Comparison rate

From 0.00% (personalised)

Repayment period

3 years

Application fee


Monthly repayment


Total repayment



  • Rates 6.99% — 24.69% p.a. based on your credit assessment
  • Your rate is fixed for the life of the loan
  • Flexible repalement options - Weekly, fortnightly or monthly
ASB Unsecured Personal Loan

ASB Unsecured Personal Loan

Interest rate

From 13.90% (personalised)

Comparison rate

From 0.00% (personalised)

Repayment period

3 years

Application fee


Monthly repayment


Total repayment



  • Minimum amount $2,000.
  • Choose your repayment term, from 6 months to 7 years.
  • Make extra repayments online at any time, with no charges and no fees.

If you need to borrow funds to consolidate loans and credit card debt, take a holiday or even fund a home improvement project, a personal loan will help you handle your bills without going broke.

Many personal loans are unsecured loans, meaning that they do not need collateral. Loan amounts range from $1,000 to over $50,000 and are repaid over loan terms as short as six months or as long as seven years.

The interest rate can be either fixed or variable, and will usually be higher than the rate for a secured loan because there is more risk for the lender.

The difference between secured and unsecured loans

A secured loan requires the borrower to allow the lender to place a charge over an asset owned by the lender, typically either a house or a car. The asset offered as security may be the asset being purchased with the loan funds – often the case with a secured car loan. If the lender defaults on the loan by failing to make repayments for a significant length of time, the lender can apply to the court for the right to take possession of the asset and sell it, in order to recover the outstanding loan amount and associated costs. Because of the security of the asset backing the loan (known as collateral) the lender will see a secured loan as less risky and is more likely to approve the loan application and offer a lower interest rate.

An unsecured loan does not require the borrower to provide any collateral. It is suitable for borrowers who do not have any substantial asset to offer as security, or who may own an asset but would prefer not to risk losing it. Lenders see unsecured loans as more risky, and are more likely to either refuse the application or demand a higher interest rate.

Qualifying for an unsecured loan

Because lenders see unsecured loans as more risky (because they're not secured by a borrower's asset) they can be more difficult to get approved for. Below are some of the things that lenders look at before determining whether you qualify for a loan, and at what cost.

  • Credit score: Your credit history and score are vital considerations in the lending decision for most lenders. A very good credit score will allow you access to the lowest unsecured lending rates and the largest choice of loans. But applicants with bad credit scores will typically be offered much higher interest rates.
  • Depth of credit history: Lenders consider the scope of your financial history, and many require borrowers to have a credit history of at least two years' duration. This can make it difficult to get an unsecured loan if you have never had a credit card or a previous loan, or if you're a recent migrant. But you still have the option of a secured loan.
  • Debt-to-income ratio: Loan providers look at your debt-to-income ratio, which is your monthly debt repayment costs expressed as a percentage of your monthly income. This indicates how burdened you are by debt already. If you already have too much debt, there's a strong likelihood that you'll be unable to repay a new loan.

Alternatives to an unsecured personal loan

There are other options, besides an unsecured personal loan, if you need access to extra funds:

  • Low interest credit card: The interest rate on a low-interest credit card may be higher than the rate for a low-interest personal loan, but it provides more repayment flexibility.
  • Balance transfer credit card: Credit cards with a 0% interest promotional offer allow you to transfer balances from your existing credit cards (and in some cases from an existing personal loan) to your new card, and pay no interest charges for 6-12 months, sometimes longer.
  • Secured personal loan: Having an asset to offer as collateral will give you access to lower interest rates.

Learn about unsecured personal loans

Answers to common questions about applying for and using unsecured personal loans.

  • FAQs

  • Pros & cons

  • Tips

Can I get an unsecured personal loan with bad credit?

It's complicated but not necessarily impossible to get an unsecured loan with poor credit. However, if getting funds is not an emergency, the first step to get a poor credit loan would be to raise your credit score a little so that your application is more likely to be approved. Begin by making on-time payments, particularly on credit cards, and try to reduce the card balance to below 30% of your credit limit. You should see a definite improvement in your score within a short time frame.

However, if this is an emergency, and your loan application has been previously turned down due to bad credit or no credit, it might be useful to contact a bank or credit union loan officer for a one-on-one interview to demonstrate to them that you are creditworthy. When you get the interview, make sure to provide records to show you are a safe bet. If you can prove to them that you have been living in the same house or town for many years and working the same job, preferably with the same employer, it certainly will help your case.

How does your credit score affect the interest rate on an unsecured personal loan?

A higher score increases the confidence a lender has that you will make payments on time and will help you apply for reduced interest rates and fees. On the other hand, a credit score below 500 might make it more difficult to secure a loan, so the interest rates could be higher.

Is an unsecured personal loan more expensive than a secured personal loan?

Yes, it is. Unsecured loans generally have higher interest rates than secured loans. This is because lenders may consider unsecured loans very risky. Without guarantees, the lender may fear that you are not likely to pay back the loan as planned. In general, a higher risk to your lender means a higher interest rate for you, and possibly higher fees as well.

What can I use an unsecured personal loan for?

When you receive your unsecured loan funds you can use them for any purpose you choose. A secured loan, on the other hand, may require you to use it to purchase the asset on which it is secured (often the case with a car loan).

Some people use unsecured loans to handle unexpected expenses, take a holiday, renovate their home, or buy cars or consumer goods. Others use an unsecured loan to consolidate their debt.

What is an unsecured loan?

An unsecured loan needs no collateral, such as a house, car or boat. Instead, lenders issue these loans based on your creditworthiness, which covers factors such as your financial history, wages, expenses and outstanding debts.

You can use funds from an unsecured personal loan to pay for just about anything, but the ideal personal loan will help you realise a financial goal without adding debt that cannot be managed.

Unsecured loans are the most costly form of personal loan, but are less risky for the borrower as you don’t need to provide collateral and so your asset is not at stake should you have problems with repayments. However, the compromise is a higher interest rate, and in some cases, a smaller loan amount.

Who is eligible for an unsecured personal loan?

Anyone who needs to raise funds can apply for an unsecured loan, but you must meet the eligibility requirements:

  • Age. You must be at least 18 years old and typically under 55 years old to be considered.
  • Credit score and history. You must also have a decent credit record. Your past behaviour with credit is an indication of how likely you are to pay off a new loan in the required time.
  • Income. You need to demonstrate that your income is sufficient to meet repayments, and are likely to be asked for recent payslips or a letter from your employer confirming your salary. The lender may also look at your debt-to-income ratio.
  • Proof of identity, address, and citizenship or residency. These are documents common to all loan applications, and you'll need to supply copies of them when you make your online application.

Harder to get approved for

If your credit score is less than stellar, or you have a few negative entries in your credit history, it can be more difficult to get approved for an unsecured loan.

Higher interest rates

Unsecured loans typically charge higher interest rates than secured loans.

Loan amounts offered may be smaller

Lenders may reduce the loan principal amounts they offer in order to reduce their level of risk on an unsecured loan. If you need a large loan, you may have to apply for a secured loan and offer collateral.

More flexible

You can use an unsecured loan for almost any purpose. Secured loans sometimes require you to be purchasing the asset that will secure the loan.

No assets at risk

Even if you own assets that you could potentially offer as security, having an unsecured loan means that you are not at risk of losing any assets you provided as security.

No need for collateral

You can get an unsecured loan without providing collateral, which is a great help for younger or less affluent borrowers who may not own assets.

Possibly higher fees

Because unsecured loans are more risky for the lender, you may be charged higher fees to compensate for the elevated risk.

A good credit score increases your chance of being approved for an unsecured loan

Not only will a good credit score give you access to lower interest rates, it could make the difference between approval and rejection of your loan application. So check your score before you apply. You can get a free copy of your credit history report from credit agencies Centrix, illion (who also own Credit Simple) and Equifax.

If your score isn't great, it may be that there are errors on your credit report. In this case you need to contact the credit agency to explain the error and ask for it to be fixed. But if there are no errors and your score is still low, you need to work on improving it by:

  • Slowing down your spending
  • Paying bills and making repayments on time
  • Trying to repay your credit card balance in full each month
  • Not making too many applications for credit (e.g. credit cards) and doing your research before you apply

Consider a wide variety of lenders

The big banks don't have a monopoly on the best unsecured loan interest rates. The interest rates charged by many of the smaller and non-traditional lenders you'll find online are among the lowest.

How to compare unsecured personal loans

A significant part of choosing the best loan for you is to compare the unsecured personal loan features. Here are a few things to consider when doing this:

  • Interest rate. Check to see if the interest rate is fixed or variable, and how competitive it is when compared with other available loans. A fixed interest rate is guaranteed to stay the same during the term of the loan, You know in advance exactly how much you need to repay in total and each month, making it easier to budget. A variable interest rate can go up or down, meaning that you could end up paying more (or indeed, less) than you planned for.
  • Loan amounts available. Lenders may set a minimum amount (e.g. $1,000) and a maximum amount (e.g. $50,000). The actual amount available to you will depend on your individual financial circumstances.
  • Flexibility. You may want to make lump sum repayments if you have spare cash and want to get out of your loan early, but not all lenders allow this.
  • Fees and charges. There may be a set-up or application fee to pay (only charged if your application is approved). As well, look for any ongoing charges, such as regular account administration fees, late payment fees and early exit fees (possibly charged if you repay your loan before the end of the agreed term).