Secured vs unsecured personal loans

Not sure whether a secured or unsecured personal loan is right for you? We show you the differences to help you make the right choice.


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A personal loan can help you take the next step if you don’t have ready finance. Whether you want to buy a car or undertake home renovations, you’re likely to find many different lenders and loans to choose from.

If you’re looking to purchase an asset, or you already have one, you may be considering whether a secured or unsecured personal loan is the better option. We break down the differences in the guide below.

What is the difference between a secured and unsecured personal loan?

The fundamental difference between these two loans is that with a secured personal loan you have to provide an asset as guarantee, while with an unsecured personal loan you don’t. If you default on a secured personal loan, the lender can repossess the asset and sell it to recoup its losses. The asset is typically one you are purchasing with the funds you borrow from the lender, but can also be one you already own.

Secured and unsecured personal loans you can apply for

Find both secured and unsecured loan options by clicking through each of the tabs to compare what’s available.

Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Monthly Service Fee Application Fee
Lending Crowd Personal Loan
3 or 5 years
$250-$1,450 depending on the amount borrowed
A secured personal loan from $2,000 to $200,000 with repayment instalment options. Eligibility: Be an 18+ NZ permanent resident, earn $30,000 or more, have a good credit history and collateral/security.
QuickLoans Personal Loan
9.95% - 23.95%
6 to 36 months
$95-$595 depending on loan size
Borrow up to $20,000 and apply online within 5 minutes. Eligibility: Be over 18, hold permanent NZ residency, have collateral/security, earn at least $450 per week.
Admiral Finance Secured Personal Loan
13.95% - 23.95%
6 to 60 months
$125-$595 depending on loan size
A secured loan from $1,000 to $50,000 with a quick online application process. Eligibility: Be an 18+ permanent NZ resident, have collateral/security, earn at least $450 per week.
NZCU South Personal Loan (Secured)
9.90% - 28.90%
Up to 7 years
A secured personal loan up to $20,000 with personalised repayment options. Eligibility: Be an 18+ permanent NZ resident or non-resident on a working visa, earn $500+ weekly.
MyFinance Secured Personal Loan
13.95% to 24.95%
Up to 48 months
$220-$420 depending on loan size
Secured personal loans from $1,000 with competitive interest rates. Eligibility: Be 18+ and an NZ resident

Compare up to 4 providers

Harmoney Unsecured Personal Loan

Harmoney Unsecured Personal Loan


6.99 % p.a.


  • Borrow from $2,000
  • 100% online
Security Logo

100% confidential application

Harmoney Unsecured Personal Loan

Apply today to get approved within minutes for up to $50,000.

  • Max. loan amount: $50,000
  • Loan term: 36 to 60 months
  • Turnaround time: 99% of approved online applications funded in 24 hours
  • Fees: Establishment fee of $200 for loans from $2,000-$5,000 and $450 for loans from $5,000-$50,000
  • No early repayment fees
  • Personalised interest rates based on your circumstances
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Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Monthly Service Fee Application Fee
Harmoney Unsecured Personal Loan
6.99% - 29.99%
36 to 60 months
$200-$450 depending on loan size
Apply for an unsecured personal loan up to $50,000 with no early repayment fees. Eligibility: Be a NZ resident/citizen and have a good credit score.
Nectar Personal Loan
8.95% - 29.95%
6 months to 4 years
Unsecured loans from $1,000 with payouts made within one day of approval. Applications entirely online. Eligibility: Must be 18+, an NZ citizen or permanent resident, and have an income of $350 per week or more (after tax).
NZCU South Personal Loan (Unsecured)
10.90% – 28.90%
Up to 7 years
An unsecured personal loan up to $20,000 with personalised repayment options. Eligibility: Be an 18+ permanent NZ resident or non-resident on a working visa, earn $500+ weekly.

Compare up to 4 providers

What kind of assets can you use as security?

Lenders are willing to use a variety of assets, which hold value, as a guarantee for a loan. Whether you are looking to purchase one of the following items, or already own one, you might be able to use it as security for a loan:

  • Vehicles. Including new and used cars; motorbikes; boats; caravans and even jet skis.
  • Property. If you own a property outright or hold equity in a mortgaged property, you can use it as security.
  • Term deposits. If you hold a term-deposit account with a lender, they may be prepared to use the amount as a guarantee for the loan.
  • High-cost assets. Some lenders accept high-cost jewellery, fine art and other items. Check with the lender to see what they deem acceptable.

What type of loan is better for you?

If you’re unsure what type of personal loan you should apply for, here are some considerations to bear in mind:

  • Buying a vehicle. The age, cost and model of vehicle has a bearing on whether you can, or should, get a secured personal loan or whether an unsecured loan is a better option. Some lenders only accept new vehicles as security. If you want an older car, it may need to pass a vehicle inspection check and be under a certain age, eg seven years.
  • If you want to use the loan amount for various purposes. Lenders offering secured loans tend to place restrictions on the use of the loan amount. For example, if you wish to take out a secured car loan but also want to buy some furniture, the lender may not let you borrow more than the cost of the car.
  • If you aren’t looking to purchase an asset. You will need to own an asset already that you want to use as security. While this is a less common form of a secured personal loan, it is an option on offer from some lenders.

How you can compare secured and unsecured personal loans

While both types of loans are a viable way to finance a new purchase, you can decide which option better suits your needs by comparing them to one another. Here are some main points for the comparison:

  • Interest rates. As secured personal loans are less risky for lenders, they tend to come with a lower interest rate. You can find fixed and variable rates for both secured and unsecured loans.
  • Fees. You won’t find a significant difference in costs between the two credit types. Expect establishment fees for both loans, although you can find lenders that don’t charge a fee to set up the loan. Some loans come with monthly payments, but these are not standard. Make sure do a comparison, so you know your loan is competitive.
  • The flexibility of repayments. The difference lies in whether the loan is fixed or variable. If you apply for a fixed-rate loan, you are more likely to find penalties for extra repayments and repaying the loan early. Variable rate loans are less likely to have these penalties. Check out the lenders to discover your most viable option.
  • Loan terms. For both secured and unsecured loans, you usually find terms of between one and five years for fixed-rate loans and one and seven years for variable rate loans.
  • How you can use the funds. If you apply for an unsecured loan, you typically use the funds for whatever purpose you want. Secured loans tend to come with more restrictions. For example, if you’re taking out credit to pay for a car, the lender may require you to use the entire loan amount to pay for the cost of the vehicle.

What to consider before you apply

  • Can you afford the repayments? If you’re opting for a secured personal loan, the lender can repossess the asset if you can’t afford the repayments. If you are considering an unsecured personal loan, bear in mind that the interest rate is likely to be higher and so the ongoing repayments are more costly.
  • How much flexibility do you want with your loan amount? If you’re going to use your loan to make a large purchase, and also other items, check whether the lender allows this with a secured loan. If you can’t find a secured loan that provides for this, you may need to apply for an unsecured personal loan.
  • Do you want a fixed or variable rate loan? Depending on the type of loan you want to take out, you may see more fixed or more variable rate loan options. For example, if you’re considering a secured car loan, you may find more fixed-rate loans than variable rate loans. It’s essential to compare all the available options before you apply.

The points always come back to comparison – which option is best for you? The only way to decide is to think about your situation, your needs and the loan type that is going to work for what you want to purchase.

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