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What is an unsecured personal loan?

If you need extra money for something big – whether that’s a tropical getaway, a new kitchen or to consolidate and simplify your outstanding debts – you might be thinking about a personal loan. But what’s the difference between an unsecured personal loan and a secured personal loan and what does it mean for you?

Secured or unsecured – what’s the difference?

A secured personal loan is called that because it’s secured against something you own – like your house or car. That means if you can’t repay the debt for some reason, the lender could sell the asset to get their money back. On the other hand, an unsecured personal loan isn’t secured against your property and you can use it for just about anything without having to dip into or deplete your savings.

Given that an unsecured loan doesn’t have any security, the level of risk is higher for the lender which means the interest you’re charged may be higher than on a secured personal loan. With either loan type, the amount you pay also depends on how much you borrow and the length of your loan.

The benefits of an unsecured loan

Unsecured loans can have lots of advantages, including:

  • No risk to your personal property – if you can’t pay your loan due to unforeseen circumstances, you won’t lose your home or other assets.
  • A variety of uses – you can use the money for purposes ranging from a holiday or a wedding through to debt consolidation or medical expenses.
  • A lower interest rate than many credit cards – if you’re currently paying a high rate on your credit cards, you could consider consolidating your debts onto a personal loan with a lower rate to save money.
  • A quick application process – you can often apply online in a few minutes and approval can be fast. For instance, Westpac customers in many cases could get loan funds within 60 minutes of final approval.*
  • Control over your repayments – with a personal loan, you can choose a repayment term and amount that is right for you, so you know right from the outset when your debt will be paid off.

Think it through

As with any financial decision, you probably want to consider the pros and cons of an unsecured personal loan, make sure it’s within your budget and compare different loans before making a choice.

If you want to learn more, read about how personal loan repayments work.

Alternatively, if you’re ready to get started, take a look at our Unsecured Personal Loan.


Things you should know

Online Banking Terms and Conditions (PDF 236KB)

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice. Please consider your individual circumstances before applying for a Westpac Personal Loan. Credit criteria, fees, charges, terms and conditions apply. Information correct as of 19 May 2022. 

^Comparison rates: Comparison rates help you understand the true cost of a loan. All comparison rate examples shown are for a personal loan amount of $30,000 and a term of 5 years. WARNING: Comparison rates apply only to the example or examples given and may not include all fees and charges. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

  • Unsecured Personal Loan repayment terms range from 1 to 7 years. Interest rate ranges and representative examples are based on an unsecured loan of $30,000 borrowed for 5 years with the interest rate of 7.99% p.a. (comparison rate 9.18% p.a.), the estimated total amount payable including fees is $37,513. The actual rate offered may be higher or lower than the comparison example above. Rates currently range from 7.99% p.a. to 17.49% p.a. (comparison rate from 9.18% p.a. to 18.62% p.a.)
  • Car Loan repayment terms range from 1 to 7 years. Interest rate ranges and representative examples are based on a personal loan of $30,000 borrowed for 5 years with the interest rate of 6.49% p.a. (comparison rate 7.69% p.a.), the estimated total amount payable including fees is $36,224. 

*Access to funds within 60 minutes: Available for existing customers who are approved for an Unsecured Personal Loan. Loan funds will be disbursed into an existing Westpac transaction account 60 minutes from when e-contract acceptance has been received. Funds requested to be transferred to a non-Westpac account will take up to 3 days.

##The lending establishment fee will be added to your loan amount. Please read full terms and conditions before making a decision to apply for a Westpac Personal Loan.