Private unsecured loans provide funding without requiring property or asset security, offering fast access for those without collateral.
What Are Private Unsecured Loans?
Private unsecured loans are personal or business loans from non-bank lenders with no property or asset security required - only personal guarantee.
No security means:
- No property mortgage
- No asset charge
- Just your promise to repay
- Signature only
Who Offers Private Unsecured Loans?
Non-Bank Personal Lenders
Rates: 12-22% p.a. Amount: $5,000 - $50,000 Term: 1-7 years
Online Lenders
Rates: 10-20% p.a. Amount: $2,000 - $35,000 Term: 1-5 years Speed: 24-48 hours possible
Private Credit Providers
Rates: 15-25% p.a. Amount: $5,000 - $100,000 Best for: Bad credit accepted
Peer-to-Peer Platforms
Rates: 8-18% p.a. Amount: $5,000 - $40,000 Process: Online marketplace
Private Unsecured Loan Rates
By Credit Quality:
- Excellent credit (750+): 10-14% p.a.
- Good credit (650-750): 12-18% p.a.
- Fair credit (550-650): 16-22% p.a.
- Poor credit (<550): 20-28% p.a.
Why higher than secured?
- Higher risk for lender (no security)
- Higher default rates
- Compensates for risk
Example: $20,000 Unsecured, 5 Years
Good credit @ 14% p.a.:
- Monthly: $465
- Total interest: $7,900
- Total: $27,900
Fair credit @ 20% p.a.:
- Monthly: $528
- Total interest: $11,680
- Total: $31,680
Difference: $3,780
Requirements
Typical requirements: ✅ Regular income (minimum $30k-$40k p.a.) ✅ Australian residency/citizenship ✅ Age 18+ ✅ Bank account ✅ Contact details ✅ Proof of identity
Credit: Flexible - bad credit accepted by some lenders
Income verification:
- Payslips (PAYG)
- Bank statements (self-employed)
- Tax returns (sometimes)
Secured vs Unsecured Comparison
$30,000 Loan, 5 Years:
Secured (Property):
- Rate: 10% p.a.
- Monthly: $637
- Total interest: $8,220
- Risk: Property
Unsecured:
- Rate: 16% p.a.
- Monthly: $731
- Total interest: $13,860
- Risk: Credit score only
Extra cost unsecured: $5,640 Benefit: Property not at risk
When to Choose Unsecured
Choose unsecured when: ✅ Don't own property ✅ Don't want property at risk ✅ Smaller amount (<$30k) ✅ Very fast approval needed (no valuation) ✅ Short-term need
Choose secured when: ✅ Own property ✅ Larger amount ($50k+) ✅ Want lowest rate ✅ Longer term needed ✅ Happy to use property as security
Advantages
Benefits of unsecured:
- No property required
- Fast approval (1-3 days)
- No valuation needed
- Property not at risk
- Simple process
- Available to renters
Disadvantages
Drawbacks:
- Higher interest rates (12-28% vs 8-14%)
- Lower loan amounts ($50k max typically)
- Shorter terms (1-7 years vs 10-30)
- Stricter income requirements
- Higher credit score needed (generally)
Common Uses
Top uses for private unsecured loans:
- Debt consolidation (credit cards)
- Car purchase
- Medical/dental expenses
- Home improvements (minor)
- Wedding costs
- Holiday/travel
- Emergency expenses
- Moving costs
- Education fees
- Small business working capital
Default Consequences
If you can't pay unsecured loan:
What lender CAN do:
- Report to credit bureaus (ruins credit)
- Engage debt collectors
- Court judgment
- Garnish wages
- Bankruptcy proceedings
What lender CAN'T do:
- Take your property (no security)
- Seize assets (no charge over them)
Still serious consequences for credit
Need unsecured private loan? Compare unsecured loan options.