An unsecured personal loan means you don’t have to put up any collateral to borrow money. But because there is higher risk, you generally pay a higher interest rate. The idea behind an unsecured loan is that it can help you get what you need now, with a simple arrangement to pay for it over time. Start comparing unsecured personal loans from Australian lenders below.
Fixed
Borrow up to $50,000 unsecured from the only lender with no fees and none of the bank. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Winner of Mozo’s Experts Choice Unsecured Personal Loan 2021 award.
Terms from 2 to 7 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $34,757.21 including fees.
Read our Mozo Review to learn more about the NOW Finance No Fee Unsecured Personal Loan
Excellent Credit
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.45% would cost $34,590.57 including fees.
OurMoneyMarket offer competitive low rates for borrowers with excellent credit on loans up to $75,000, plus free extra repayments and fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award^.
Read our Mozo Review to learn more about the OurMoneyMarket Low Rate Personal Loan
Unsecured, Fixed
Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 4.99% would cost $33,959.97 including fees.
Excellent credit score needed to obtain this rate. Enjoy no-fuss personal loans of up to $30,000 with Alex Bank. No hidden early repayment penalties. Terms from 6 months to 5 years. Convenient, 100% online approval. Must be over 18 to be eligible (other eligibility criteria may apply). Winner of Mozo's Experts Choice Best New Loan Product award 2021^.
Read our Mozo Review to learn more about the Alex Bank Personal Loan
Unsecured, Fixed, Excellent Credit
Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 6.39% would cost $35,126.40 including fees.
With low rates for borrowers with excellent credit, a quick 1 minute rate estimate and simple online application, there’s a lot to love about this loan! You’ll not only benefit from no exit fees, there are also no early repayment fees. You could qualify by simply earning above $25,000 and you’ll be on the way to start spending (other eligibility criteria may apply).
Read our Mozo Review to learn more about the Plenti Personal Loan
Fixed
Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,832.61 including fees.
Fast, easy and 100% online, this is a low cost loan with no ongoing fees or extra repayment penalties. It's perfect for savvy borrowers with great credit. If you’re over 18 and earn above $30,000, you could qualify (other eligibility criteria may apply).
Read our Mozo Review to learn more about the Harmoney Unsecured Personal Loan
Excellent Credit, Fixed
Terms from 2 to 5 years. Representative example: a 3 year $10,000 loan at 5.95% would cost $10,943.74 including fees.
Be rewarded for your good credit history with low rates. No ongoing fees. Pay off your loan with no early repayment penalties. Apply online and get a quote in minutes
Read our Mozo Review to learn more about the SocietyOne Unsecured Personal Loan
Variable, Unsecured
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $35,190.18 including fees.
Get a personalised rate quote in just 2 minutes, apply in just 7 minutes. Lower rates for better credit. Money transferred to your account in 24 hours. No exit or early repayment fees. Borrow up to $50,000.
Read our Mozo Review to learn more about the Symple Loans Personal Loan
Fixed
Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 6.49% would cost $35,210.64 including fees.
Low personalised rates, ideal for borrowers with excellent credit. No monthly account fees, no early payout fees, so you can pay off your loan sooner. $0 establishment fee for loans from $5,000 to $30,000, a $595 establishment fee will be charged on loan amounts of $30,001 to $64,000.
Read our Mozo Review to learn more about the Wisr Unsecured Personal Loan
Fixed
Terms from 2 to 7 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $34,757.21 including fees.
Borrow up to $50,000 unsecured from the only lender with no fees and none of the bank. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Winner of Mozo’s Experts Choice Unsecured Personal Loan 2021 award.^
Read our Mozo Review to learn more about the NOW Finance No Fee Unsecured Personal Loan
Good Credit
Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 6.25% would cost $36,103.67 including fees.
Consolidate your credit cards and other loans into one low monthly repayment with OneDebt. Low rates with approvals typically within 60 minutes. Flexible repayments with no early exit fees. Must be employed with decent credit history.
Read our Mozo Review to learn more about the MoneyMe OneDebt Low Rate Personal Loan
Fixed, Unsecured
Terms from 1 to 7 years. Representative example: a n/a year $0 loan at 7.99% would cost $6,988.90 including fees.
Heritage Bank discounted rates for borrowers with excellent credit. Available loans starting from $5,000 to $25,000. Your choice of loan terms up to five years. Extra repayments allowed, but may incur fees.
Read our Mozo Review to learn more about the Heritage Bank Standard Personal Loan
Fixed, Unsecured
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 7.99% would cost $37,518.90 including fees.
Special Offer: Enjoy no interest and no repayments for the first 3 months with a Better Start Personal Loan. Available for new personal loan customers, borrowing $20K+ to consolidate their debts. Offer ends 8 December 2021 (T&C’s apply). Stay in control with a Fixed, Unsecured rate for the life of the loan.
Read our Mozo Review to learn more about the Latitude Personal Loan
Very Good Credit
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 8.49% would cost $37,171.08 including fees.
Competitive low rates on loans up to $75,000 for excellent credit. Free extra repayments. Fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award^.
Read our Mozo Review to learn more about the OurMoneyMarket Low Rate Personal Loan
Fixed
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 9.39% would cost $37,881.66 including fees.
Borrow from $5,000 to $50,000 with low rates for great credit. No account keeping fees. Free extra repayments and redraw facility. Same day approval may be possible. Winner of Mozo's Experts Choice Award for Australia's Best Large Credit Union 2021^.
Read our Mozo Review to learn more about the Great Southern Bank Unsecured Personal Loan
Fixed, Unsecured
Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.99% would cost $36,383.67 including fees.
Borrow from $5,000 to $55,000 with a 1 - 7 year flexible loan term with NAB. Get competitive low rates for excellent credit. Enjoy no fees for extra repayments and no early exit fees. NAB accepts documents online so you can get your funds fast.
Read our Mozo Review to learn more about the NAB Personal Loan
Unsecured, Variable, Excellent Credit
Terms from 1 to 3 years. Representative example: a 3 year $10,000 loan at 6.39% would cost $11,015.63 including fees.
With low rates for borrowers with excellent credit, a quick 1 minute rate estimate and simple online application, there’s a lot to love about this loan! You’ll not only benefit from no exit fees, there are also no early repayment fees. You must be over 18 to qualify and earn above $25,000 (other eligibility criteria may apply).
Read our Mozo Review to learn more about the Plenti Personal Loan
Terms from 1 to 10 years. Representative example: a 5 year $30,000 loan at 5.79% would cost $34,873.55 including fees.
Handypay offer flexible green loans up to $75,000 for Excellent Credit or better. Handypay is a specialist home improvement plan provider.
Read our Mozo Review to learn more about the Handypay Green Loan
^See information about the Mozo Experts Choice Personal loans Awards
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If you're looking to borrow money but can't make up your mind whether an unsecured personal loan is the right pick for your situation, you've come to the right place.
Get familiar with the ins-an-outs of borrowing with a personal loan in this expert guide on everything you need to know about unsecured personal loans, from why your credit rating is important to the features to look out for.
An unsecured loan is a personal loan that lets you borrow money without having to provide something you own as security, such as your house or car. As the risk is higher for the lender, an unsecured personal loan may have a higher interest rate, shorter loan term and lower maximum loan amount than a secured loan.
See how unsecured loans differ from secured personal loans.
Unsecured personal loans can be used for just about anything (within reason of course). So whether you want to renovate your kitchen, finance some extra study, facilitate your dream wedding or just jet set around the globe for a stint, an unsecured loan could help you make your dreams a reality sooner.
Another popular use for unsecured personal loans is debt consolidation, where you consolidate multiple loans or credit card debts into a single personal loan in order to manage your repayments more easily and save on interest costs.
You'll want to compare loans from both banks and non-bank lenders to make sure you find the most competitive loan for your needs. Key features to compare include the interest rate, application fee, ongoing fees and added features such as the ability to make extra repayments or pay off the loan early without penalty.
Many lenders will give you the option to choose a fixed or a variable rate for your unsecured personal loan. With unsecured loans there may not be a big difference between the interest rate of a variable rate loan and a fixed loan, the difference will be in the features like extra repayments, redraws and fees if you decide to pay out the loan early.
In Australia, lenders will typically let you borrow anywhere from $2,000 to $70,000 with an unsecured personal loan, although some lenders cap the loan amount at $50,000 and a few will let you borrow $100,000 or more. For larger loan amounts, you may need to consider a secured personal loan.
Unsecured loan terms are also often shorter (around 1 -7 years) than they are for secured loans, which can reach up to 15 years.
Unlike a secured loan, where you may receive lower interest rates and fees if you use your car or home as collateral for the loan, no security is required to take out an unsecured personal loan. This means you can still borrow money even if you don't have a car or property to use as security, plus your assets won't be in the direct firing line of the provider if you can't repay the loan.
The catch is you may pay higher rates and fees. And keep in mind, you are not entirely scot free if you can't meet your repayments and default on an unsecured loan, as the lender can still take you to court to recover their loss.
Pondering the age old question "to fix or not to fix"? Here's what you need to know about the two interest rate options to help you decide:
Fixed interest rate: With the rate locked in from the get go, a fixed rate loan helps you to more easily budget for your fortnightly or monthly repayments. There are a number of extremely competitive fixed rate personal loans on the market, with rates very much on a par with variable loans. But fixed rate personal loans can sometimes have less flexibility, such as not giving you the ability to make extra repayments, and some come with a break cost fee if you try to pay off your loan early.
Variable interest rate: A major drawcard of a variable rate loan is the ability to access more flexible options than you might be able to with a fixed rate loan, such as the ability to make extra repayments facility and access a redraw facility. Before choosing a variable loan however, make sure you can afford any potential rate rises. For instance, if you borrow $20,000 over 4 years and your 10% interest rate increases by 0.75 basis points, your monthly repayments will increase from $507 to $514. This might not seem like much but over 4 years that will cost you $347 extra in interest.^
When it comes to choosing between a fixed or variable rate, you're never going to be able to predict what will happen in the market, so it’s a good idea to choose the rate that works best for your circumstances.
Although interest rates and fees are the top two considerations for an unsecured personal loan, you should also look for features that could give you added flexibility and even help you say goodbye to your debt sooner. Here are a few to keep your eyes peeled for:
Extra repayments: Pay off your unsecured loan faster by ensuring you sign up with a loan that gives you the option of 100% free extra repayments. This will allow you to make lump sum payments any time you like.
Redraw facility: Another feature that can come in handy down the track is a redraw facility that allows you to dip into any extra payments you've made. But keep in mind redrawing your extra repayments undoes the progress you made towards paying your loan off sooner and saving on interest.
Choice of repayments: Some lenders give you a choice of weekly, fortnightly or monthly repayments, allowing you to choose the schedule that best fits your pay cycle or lifestyle.
Many borrowers make the mistake of focusing too much on finding the cheapest interest rate and forgetting to check loan fees. There are a number of fees that can sting unsuspecting borrowers, so here are the main ones to watch out for:
Upfront fee: In Australia, it's quite common for lenders to charge an unsecured personal loan application fee, and in some cases, these can be quite hefty. Fees can range from $100 to $500 or more, but some lenders charge a $0 application fee, so it pays to shop around.
Account fees: Monthly fees for unsecured personal loans are typically around $10 a month, but many loans charge no account fee at all. If you're not keen on paying ongoing fees, look for a loan that has none.
Early repayment fee: Some unsecured loans charge a fee for repaying your loan earlier than the agreed fixed term. So if, for instance, you take out a 3 year unsecured personal loan but end up wanting to pay it off completely in year 2, you may be hit with a fee for doing this. These fees can be quite substantial, so if you think there's a chance you may be willing and able to pay off your loan early, it may be a good idea to choose one with no early repayment penalty.
An easy way to see how much an unsecured loan will cost is by looking at the comparison rate, which merges the interest rate with the fees to show you the 'true’ cost of the loan.
^Calculations as of 4 November 2019
Most mainstream lenders will likely knock back your application for an unsecured personal loan if you have a bad credit rating. As you are not securing the loan with an asset, the only way a lender can determine how risky it will be to lend to you is through your credit rating.
Lenders often have tiered unsecured personal loan rates based on credit rating, so if you have an excellent credit rating you may be able to access lower interest rates than someone with an average or poor credit rating. Lenders will check your credit rating when reviewing your loan application, so it's important that you check your credit report prior to applying and ensure that all the information is correct. Also be mindful that every personal loan you apply for will leave a mark on your credit report.
Did you know you can get a free copy of your report each year? See here for details.
If you're smart about it and pay your repayments in full each month, an unsecured loan is a great way for you to build up a good credit history, which will mean when it comes time for you to borrow a larger amount for things like a home, it will be much easier for you to be approved for a home loan.
With no security to offer as a guarantee, getting approved for an unsecured personal loan can be more difficult than for a secured loan, as lenders generally have tougher lending criteria. To increase your chances of success, make sure you keep on top of any credit card and utility payments, reduce any credit card limits you don't use or need, be vigilant with your spending and diligently put aside money into your savings account. Anything you can do to show the lender that you're more than capable of repaying the loan will help.
Whether to use an unsecured loan or a credit card really depends on your situation and your money management ability. Unsecured personal loans let you borrow an agreed amount and make regular, fixed repayments over a period of time to pay it off, so if you've taken out a 3 year loan you'll be debt free in 3 years. Credit cards on the other hand, don't come with a set repayment plan so if you're not careful you can end up in debt for decades.
Another plus for unsecured loans is that interest rates are usually lower than credit card rates. And if you have an excellent credit rating, you may be able to access even more competitive unsecured loan rates.
Lastly, with an unsecured loan you'll have the option of choosing a variable or fixed interest rate unlike credit cards which only come with variable rates. For a full comparison, read our personal loans vs credit cards guide.
When you start your hunt for a competitive unsecured loan, don't automatically go for a bank personal loan, as there are plenty of other loans from online lenders, mutuals and peer to peer lenders with great rates and features, due to the fact that they have lower overheads and don't need to pay dividends back to shareholders.
Mozo's personal loan comparisons above let you enter how much you want to borrow to see what rates are available from different lenders and how much your monthly repayments will be.
And to really get the lowdown on a lender, head on over to our personal loan reviews section where thousands of customers just like you share their experience from the customer service to the product fees and features.
Applying online for an unsecured loan is a fairly quick and easy process. Most online application forms take less than 10 minutes to complete, and some lenders even offer a 1 minute rate estimate. Once you've submitted your application, the lender will process it and let you know whether it's approved or not. This can happen in as little as 24 hours, and in some cases you may even be able to get your funds on the same day.
That’s easy. Once you have found the best unsecured personal loan for your needs on Mozo, you’ll be directed to the online application. Many lenders have fast 20 minute approvals so get all the info you’ll need like proof of employment, bank statements and utility bills, and apply.
An unsecured loan is a type of personal loan that doesn’t require the borrower to put up an asset as collateral. Like other loans, a borrower must pay back their debt over a fixed period of time (usually between 1 and 10 years), making regular repayments that cover both the interest that is charged and the balance being paid down. In some cases, borrowers can make extra repayments and pay down their loan ahead of time.
An unsecured personal loan can both help or hurt your credit rating, it all depends on how you pay it back. If you are a responsible borrower and always make your regular repayments on time, and even make extra repayments too, this looks good on your credit history. Alternatively if you miss repayments or even default on your loan, this can negatively affect your credit rating and your chances of borrowing later.
Depending on your credit score and the lender, you still may be able to take out an unsecured personal loan with ‘bad’ credit. Many Aussie personal loan lenders offer risk-based pricing where lower rates are given to borrowers with an excellent credit history and higher rates to those with worse credit. While this does benefit those with healthy credit, in some cases it also provides borrowers with unhealthy credit the opportunity to borrow. In saying that, it’s always better to borrow when your credit rating is healthier because you are likely to get a lower interest rate.
Unlike a secured personal loan, if you don’t pay back an unsecured loan the lender can’t repossess your assets. However, leaving an unsecured personal loan unpaid will damage your credit rating, which impacts your ability to borrow later on. Plus, the lender can also take legal action against you to make you pay back the loan.
The main advantage of an unsecured personal loan is that you don’t need to secure the loan with an asset like your home, car or savings. This means if you forfeit the loan you won’t have to forfeit any of your belongings. Another advantage is that your loan application may be approved faster, as the lender doesn’t have to evaluate an asset for security. Just remember though, because there is no requirement to put up any collateral, unsecured personal loans generally come with higher interest rates than secured options.
A secured loan is a type of personal loan that requires the borrower to put up an asset against the loan as collateral, in return for a lower rate. Alternatively, an unsecured personal loan doesn’t require an asset as collateral but often comes with a higher interest rate.
Yes, banks offer unsecured personal loans, as do credit unions and online lenders. Depending on what type of loan you are after, it may be beneficial to steer away from taking out a loan with a big bank as you may be able to snag a more competitive rate.
Yes, online unsecured personal loans are available to Aussie borrowers. With online loans, you can apply, get approved and manage your repayments all from your computer or even your smartphone. Plus, some of these types of lenders offer the most competitive personal loan rates on the Mozo database right now.
Do not use this bank, applied for a personal loan, they advertise simple and easy, what a joke, supplied documentation to them, looks like I was dealing with idiots overseas as most of my correspondence was online due to work commitments. Instead of looking over the application and telling me what they wanted me to supply first go instead of coming back in drubs and drabs asking for information, I supply it and they tell me they didn’t receive it, but I have proof it went through but anyway. Not reading emails properly or even knowing what they are asking for when it’s right in front of them. At one point some one in their assessing team sent an email and said application was not successful. Next day I get an email from them saying we need more information??? I said you knocked the application back and the guys says oh no we haven’t finished processing it?? I then emailed them what they said and they apologised for confusion, but still going back and forth. Not well trained staff, either I ended up pulling the application and went to another bank and got the loan in 24 hours. Do not waste your time and energy!
Read full reviewDo not use this bank, applied for a personal loan, they advertise simple and easy, what a joke, supplied documentation to them, looks like I was dealing with idiots overseas as most of my correspondence was online due to work commitments. Instead of looking over the application and telling me what they wanted me to supply first go instead of coming back in drubs and drabs asking for information, I supply it and they tell me they didn’t receive it, but I have proof it went through but anyway. Not reading emails properly or even knowing what they are asking for when it’s right in front of them. At one point some one in their assessing team sent an email and said application was not successful. Next day I get an email from them saying we need more information??? I said you knocked the application back and the guys says oh no we haven’t finished processing it?? I then emailed them what they said and they apologised for confusion, but still going back and forth. Not well trained staff, either I ended up pulling the application and went to another bank and got the loan in 24 hours. Do not waste your time and energy!
Corporate robots, don't lend to singles the two percent deposit scheme is rubbish, I tick all boxes and can afford the loan but cannot get because of unrealistic lending criteria. All banks.
Read full reviewCorporate robots, don't lend to singles the two percent deposit scheme is rubbish, I tick all boxes and can afford the loan but cannot get because of unrealistic lending criteria. All banks.
Don’t believe the TV commercials, Jackson was dismissive and short. Pretty ordinary all over.
Read full reviewDon’t believe the TV commercials, Jackson was dismissive and short. Pretty ordinary all over.
