Unsecured or secured personal loans - what’s the difference?

At Unity, we offer both secured and unsecured personal loans. Whether you plan to buy a car, go on holiday, or remove some daily stresses by consolidating your debts, we have options that could suit you.

So, what’s the difference between these two types of personal finance options? Read on as we explore them below:

What is a secured loan?

A secured loan requires the borrower (you) to offer some form of asset (such as your car) to be used as the security. Because you are securing your loan with an asset, the interest rate is lower than on an unsecured loan. Unity’s interest in the security is registered on the Personal Property Security Register (PPSR) until your loan is repaid in full. If the borrower was to default on their loan, and Unity was unable to come to an arrangement with the borrower, the security may be used to repay some or all of the debt owing to Unity.

What kind of asset can I use to secure a loan?

Examples of assets you could use to secure your loan include:

  • Car
  • Boat
  • Motorbike
  • Caravan

All vehicles taken as security must have a current registration and warrant of fitness.

What are the benefits of securing my loan?

The interest Unity offers on a secured loan is up to 2% lower than for an unsecured loan. Paying less interest saves you money over the duration of your loan. The maximum amount you can borrow on a secured loan is also larger than on an unsecured loan.

What is an unsecured loan?

An unsecured loan does not require the borrower (you) to provide any form of security - or the assets listed above - when borrowing. Typically, this form of finance is offered in a smaller amount than a secured loan but is charged at a higher interest rate due to the lack of security. Here at Unity, we offer unsecured personal loans up to $40k.

Which type of lending is right for me?

At the end of the day, the type of loan that is best for you depends on your current financial situation, personal goals, and whether you have suitable security to offer.

Are you interested in a Personal loan from Unity? Simply apply online today. Need more information on secured or unsecured personal loans? Give us a call on 0800 229 943 or pop into your nearest branch to talk to our friendly team.


* Terms and conditions and responsible lending criteria apply. On drawdown, a $200 approval fee and other fees will apply. Click here to view our rates and fees.