Secured vs. Unsecured Loans

There are two primary loan types - secured and unsecured. At Pepper Money, if you need to buy a car or finance any other asset, we provide you the flexibility to choose between an unsecured personal loan and a secured loan. So what’s the difference?

Secured personal loan

Secured personal loan

A secured personal loan is most often used to purchase valuable assets such as cars; the vehicle (or other asset) is then used as security against the loan. Because the loan is asset backed, the interest rate is lower.

If you fail to make your repayments on a secured loan, the asset you have used as security may be repossessed to cover the outstanding balance on your loan. 

Product Features:

  • Fixed repayments for the life of the loan
  • Lower interest rates than the equivalent amount borrowed as an unsecured personal loans
  • Purchase new or used vehicles up to 15 years old (at the end of term)
Unsecured personal loan

Unsecured personal loan

Unsecured loans are often taken out to cover the cost of smaller amounts such as a holiday or home renovation. With an unsecured loan the borrower isn’t providing any security against the loan. This means that the interest rates are higher as there is no asset to be recovered in the event of a default.

Product Features:

  • Borrow up to $50,000
  • Choose between a fixed or variable rate loan
  • No establishment fee or monthly account keeping fees
  • Apply online and find out if you are conditionally approved within 20 minutes

Help at hand

For more of your questions answered visit our Help Centre.

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