Compare Unsecured Personal Loans

Mozo’s personal loan comparison tools, calculators, and expert tips are here to help. Compare unsecured loans below.

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Personal Loan Comparison on Mozo

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Last updated 5 November 2024 Important disclosures and comparison rate warning*

What is an unsecured personal loan?

An unsecured personal loan lets you borrow money without having to put up an asset as collateral against it such as your house or car. As the risk is greater for the lender, an unsecured personal loan may carry a higher interest rate, shorter loan term, and a lower maximum loan amount than a secured personal loan.

What is an unsecured loan used for?

Unsecured personal loans can be used for just about anything. So, whether you're renovating your kitchen, hoping to finance your wedding or just want a holiday to Europe, an unsecured loan could help you make your goals a reality sooner. 

How much can I borrow?

Australian lenders will typically let you borrow anywhere from $2,000 to $70,000, although some 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. 

How do I compare unsecured personal loans?

There are three basic things to compare with any personal loan product: interest rates, fees and features. We’ll touch on rates and fees a bit more soon, but first let’s have a quick look at some features to check on.

- Extra repayments: Pay off your unsecured loan faster with lump-sum payments any time you like.

- Redraw facility: Dip into any extra payments you've made, if needed.

- Choice of repayments: Choose the best schedule for you, be it weekly, fortnightly or monthly repayments.

If you’d like to start comparing loans, simply scroll up to the product table above. In this table you’ll get a good look at some of the best personal loans in the Mozo database. You can see interest rates side by side, but also comparison rates*, loan terms, fees and even estimates of your monthly repayments. Some preliminary comparison of these basics can go a long way!

Choosing a rate: fixed or variable

Fixed interest rate: With the rate locked in, a fixed rate loan can make it easier to budget. However, fixed loans can also lack flexibility, often not allowing extra repayments. Some even come with a break cost fee if you pay off your loan early.

Variable interest rate: Here your rate is subject to change, impacted by the official interest rate set by the Reserve Bank. A major draw of a variable rate loan is the likelihood of more flexibility, such as free extra repayments and a redraw facility.

📝 Here’s a quick example:

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, so it’s a good idea to choose the rate that works best for your circumstances. You can do your own comparisons using our Personal Loan Calculator.

Okay, which loan fees should I be aware of?

Many borrowers make the mistake of focusing too much on finding the cheapest interest rate, assuming that makes for the best personal loan. However, it's also important to check what additional fees come with an unsecured loan. There are a number that can sting unsuspecting borrowers, so let’s consider them here.

  • Upfront fees: 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. 
  • Account fees: Monthly fees for unsecured personal loans are typically around $10 a month, which might not seem like much, but over a 5 year term this adds up to $600. 
  • Early repayment fees: These can be substantial, so if you think there's a chance you may be able to pay off your loan early, look for one without a penalty.
💡Top tip: Check how much an unsecured loan might really cost by looking at the comparison rate, which calculates the interest rate together with certain fees to show you a 'truer’ cost of the loan.

Do I need a good credit rating to get an unsecured loan?

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 tier unsecured personal loan rates based on credit ratings, so if you have an excellent credit rating you may be able to access lower interest rates than someone with an average or poor one. 

Lenders will check your credit rating when reviewing your loan application, so it's important that you check your credit report prior to applying. Also, be mindful that every personal loan you apply for will leave a mark on your report. 

Last word: Pros and cons of unsecured loans

Be sure to compare a few loans because the pros and cons may differ between them. 

Pros:

🟢   Borrow money without needing an asset as collateral

🟢  Usually faster approval than a secured personal loan, if you have a good credit history.

Cons:

🛑  Generally come with higher interest rates than secured options. 

🛑  Typically for smaller loan amounts of up to $100,000.

*The comparison rate gives you the ‘true’ cost of a loan by combining the interest rate and certain additional fees or charges into a single percentage rate. This makes it easier to compare loans from different lenders.

FAQs

Is it hard to get an unsecured personal 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. To increase your chances of success, make sure you keep on top of any credit card and utility payments, reduce any card limits you don't use or need, be vigilant with your spending and put aside money into your savings account. 

Are unsecured loans better than credit cards?

This depends on your financial situation and experience. Unsecured personal loans let you borrow an agreed amount and make regular fixed repayments over a period of time. 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 more debt. Another plus for unsecured loans is that their interest rates are usually lower than credit card rates. For a full comparison, read our personal loans vs credit cards guide.

Which lenders offer unsecured personal loans?

There are many personal loan providers in the Australian market, from the big banks to smaller fintechs. So when you start your hunt for a competitive unsecured loan, you don't automatically need to go with a big name. Compare a few loans first because there are also good options from online lenders, mutuals and peer to peer lenders.

How quickly can I get an unsecured personal loan?

Applying online for an unsecured loan is a fairly easy process given that most online application forms take less than 10 minutes. However, the approval process might differ from lender to lender, and can be quicker if you’re already a customer. Some lenders indicate that it’s possible to get funding on the same day, provided you meet their specific criteria.

Interest rates change regularly - subscribe and stay informed.

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JP Pelosi

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Managing editor

Managing Editor Jean-Paul (JP) Pelosi leads the editorial team, with over 20 years of experience writing for top outlets like The Guardian, The Sydney Morning Herald and News.com.au. JP's expertise in home loans and property is complemented by his rich background at major financial firms including CommBank, Suncorp and Amex. Holding a Master's in Communications and international experience in journalism, JP combines passion with skill and has a unique ability to apply this editorial experience and financial knowledge to advise the team on how to create engaging financial content for Australian consumers.

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