According to the saying, the best things in life are free. Which is all well and good, but the fact remains that big expenses such as a car, holiday, or home renovations simply aren’t possible without money – sometimes more than you’ve got access to at the time.
This is where personal loans can be very handy. And not just for major purchases. They can also be a convenient and cost-effective way to consolidate debt.
While the basic principle of a personal loan is simple enough, one aspect which sometimes causes confusion is the difference between a secured and an unsecured loan. In this article, we take a detailed look at both so you can decide which is right for you.
What's the difference between a secured and an unsecured loan?
A secured loan is 'secured' against the asset you are borrowing for, such as a car. This means that if you’re unable to repay the loan for whatever reason, the lender can sell the asset to cover their costs.
As secured loans represent less of a risk to lenders, they generally come with lower interest rates than unsecured loans.
An unsecured personal loan, on the other hand, doesn’t require an asset as security. For this reason, they tend to be used for non-material purchases like holidays and weddings, or for debt consolidation.
Which lending option works best for you?
The answer to this depends on what you need the loan for. If it’s for something which won’t result in an asset (such as the examples above), then an unsecured loan is your only choice. But if it’s to purchase something of material value like a car, the lower interest rate offered by a secure loan typically makes it the more suitable option.
Speaking of lower interest rates, it’s worth being aware of the latest addition to Great Southern Bank’s personal loans offering, namely green loans. These are available as Green Car Loans (secured loans for eligible electric or hybrid vehicles) and as Unsecured Green Personal Loans for eligible green purchases such as solar panels, battery packs, and solar hot water or heat pump systems.
Whichever green loan you choose, they’re cheaper than their non-green counterparts, so you can lower your emissions and your repayments at the same time! Who doesn’t love an environmentally-friendly bargain?
It can be hard to know which personal loan is right for you. Thankfully, our personal loans comparison page has all the information in one place to help you make the right decision.
Factors to consider before taking out a loan
While the interest rate is understandably the first thing most people look for when shopping around for a personal loan, there are other factors to consider. For example, a loan with an unbeatable interest rate might have any number of additional fees which could make it a bad choice.
To help you make an informed decision, we’re duty-bound to point out that all Great Southern Bank Personal Loans come with the following:
- $0 monthly or annual fees
- The ability to pay weekly, fortnightly, or monthly
- Unlimited fee-free extra repayments
- No penalties for early payout
Also, it’s important that you don’t end up borrowing more than you can afford to repay. A good way to ensure this doesn’t happen is with a personal loan repayment calculator.
What you’ll need to apply for a Great Southern Bank Personal Loan
If you would like to apply for a Great Southern Bank Personal Loan online, you will need the following:
- A current email address and phone number
- Your driver’s license, passport and/or another form of ID details ready. This is so we can verify your identity.
The types of documents you could be asked for could include:
- Proof of income such as recent pay slips, employment contracts, rental property statements, child support agreements, government benefit statements, etc.
- Evidence of existing debts such as your most recent loan account statements.
Explore our personal loan products
If you’re interested in learning more about our personal loan products, our personal loans page is the best place to start. But if you’d rather speak to someone in person, feel free to give us a call on 133 282. Alternatively, you can always pop into your local branch.
Important Information
Great Southern Bank, a business name of Credit Union Australia Ltd ABN 44 087 650 959, AFSL and Australian Credit Licence Number 238317. Conditions, fees and charges apply. This is general information and does not take into account your objectives, financial situation or needs. Consider the appropriateness of the information, including the Terms and Conditions (T&Cs) booklet, before acting on it. The Financial Claims Scheme may apply to this product; refer to the T&Cs for more information.