Lower interest rates

Personal loans often have lower interest rates than other lending methods, such as credit cards. If you make a major purchase using funds from a personal loan, you may pay less in interest charges.

Scheduled repayments

Similarly to a home loan, a personal loan is repaid in a series of repayments, made over a pre-set term. This structured repayment schedule allows you to make steady progress towards clearing your debt, minimising the risk of your interest charges growing unmanageable.

Types of personal loans

Secured, unsecured, variable or fixed? Having lots of options can sometimes be confusing, but it’s important to do your research and pick a personal loan that is going to suit your needs. A few minutes of reading could also save you some money.

We’ve broken down the options so you can quickly and easily identify which personal loan types are likely to meet your requirements. 


If you’re purchasing a new car or a similar large asset, then a secured personal loan may be for you.

In this type of loan, an asset (often the asset you’re purchasing) is used as security against the loan. If you were to default on your repayments, the financial institution would have the authority to repossess your asset, sell it, and use the money to cover the cost of your unpaid debt.


If you’re looking for some extra cash for your holiday, consolidating your debts, or renovating your home, an unsecured loan could do the job.

An unsecured loan doesn't require any security against the loan, making it a more flexible option for many borrowers, albeit at a higher interest rate.


A variable rate personal loan has an interest rate that can fluctuate at the lender's discretion.

Because of this, the repayments on this type of loan may go up or down, which can make it more difficult to plan a budget in advance. If interest rates decrease, your repayments will be reduced, though if the rate increases, your repayments will rise as a result.

Variable rate personal loans tend to be more flexible than fixed options, and more likely to offer additional features and benefits.


The emergency fund of personal loans, an overdraft is one option to make sure you have enough money in your account when you need it. It is a convenient way to quickly access your money for those financial emergencies that pop up when you least expect it.

You only pay interest on the money you use, however there is usually a maximum amount that you can apply for with this type of loan.

Line of credit

This type of personal loan offers flexible access to funds as you need them, rather than letting you borrow the full amount as a lump sum – like a credit card with a high limit.

The benefit is that you only pay interest on the money you use and not the total amount you’re approved for. There is also no pre-set loan term – as long as you make the minimum repayment each month, you can repay your debt as quickly or slowly as you wish.

Lines of credit are often useful for financing multiple smaller purchases that can be paid back quickly, whereas the more structured repayments of a typical personal loan could allow you to make steady progress towards paying for a single large purchase.

How to get the best deal on your personal loan

Identifying your needs, doing your research and shopping around can all help you uncover the best personal loan options for you.

Work out the amount you want to borrow

Some personal loan options have minimum or maximum amounts, so the amount you plan to borrow could limit your personal loan options.

Calculate how much you can afford to make in repayments

The more money you borrow, the higher your repayments will be, unless you opt for a longer loan term.

Work out how long it will take to pay off

The sooner you can pay off your loan, the less total interest you’ll be charged, though your repayments may be less affordable. You may also have options to make weekly, fortnightly, or monthly repayments, which may affect how much you pay in interest on your loan.

Decide between a secured and unsecured loan

Secured personal loans are more likely to have lower interest rates, as they use an asset as security, such as the car you're buying, or equity in a property. Unsecured loans don’t require you to provide security but will attract a higher rate of interest.

Prepare to apply

Organise any documentation and paperwork that's required to support your personal loan application.