Personal loans are one of the most common ways Australians pay for big expenses, from funding renovations and consolidating debt to paying for their next holiday. Most of them are unsecured, so it’s easy to assume that’s the only option. That isn’t the case, though. There are secured options on offer, too, so if you have something to put up as security, you could save a fair chunk of change on interest.
Secured personal loan interest rates
Correct as of October 2026.
What is a secured personal loan?
A secured personal loan is a loan backed by an asset you own, such as your car. The asset is known as security or collateral and gives the lender something to fall back on if you can’t repay what you owe.
That backup lowers the lender’s risk, which is why secured loans tend to come with lower interest rates than an unsecured personal loan. It can also mean you’re able to borrow more, because the loan is supported by what your asset is worth.
How does a secured personal loan work?
Apart from the security, a secured personal loan works much like any other personal loan. You receive a lump sum and repay it, plus interest and any fees, in regular instalments over a set term. Terms generally run from one to seven years, and most lenders let you repay weekly, fortnightly or monthly.
Before approving the loan, the lender checks that your asset is eligible. That usually means confirming you own it and that its age, condition and value meet their requirements. Once the loan is fully repaid, the lender releases its claim on the asset.
How much can I borrow with a secured personal loan?
Secured personal loans are available for $100,000 or more with some lenders, though minimum and maximum amounts vary. Some set the minimum at $5,000 for secured finance, while others may raise this to $10,000.
How much you can borrow depends on your lender and your circumstances, including:
- Income
- Expenses
- Credit score
- Asset value
- Dependants
If you’re not sure what you could be approved for, you can use Savvy’s borrowing power calculator for an estimate.
What happens if I can’t repay my secured personal loan?
If you fall behind on repayments, your lender can eventually repossess the asset you put up as security. That’s a last resort, and there are steps before it gets to that point. In most cases, the lender must first send you a default notice giving you 30 days to pay the overdue amount.
If you still can’t pay, the lender can repossess the asset. Within 14 days, they must send you a written notice with its estimated value, the cost of repossessing it and your rights. They can’t sell it for 21 days after sending that notice, which gives you time to pay what’s overdue and get your asset back.
You’re still responsible for the remaining balance if the asset is sold and the sale doesn’t cover what you owe. For example, if you owed $18,000 and the asset sells for $13,000, you’d still have to pay $5,000.
A default can also be listed on your credit report if a payment is more than 60 days overdue and the amount is $150 or more. Defaults stay on your credit report for five years, which can make it harder to get approved for other loans over that period.
If you think you’ll struggle to make a repayment, contact your lender before you miss it and ask for a hardship variation. They may give you extra time to pay or set up a payment plan based on what you can afford. They don’t have to agree, but asking early gives you more options. You can also call the National Debt Helpline for free, confidential advice.
What assets can I use to secure a personal loan?
You can use a car, property, savings or other valuable assets as security. What’s accepted depends on the lender, and the asset usually must meet their requirements for ownership, value, age and condition. Examples include:
- Cars, motorcycles and boats
- Property or home equity
- Savings or term deposits
- Jewellery and artwork
Secured personal loan against a car
Your car is the most common type of security for a personal loan. You can use the funds to buy a car or for any other purpose, such as a renovation or consolidating debt. If you’re buying a car, you can also apply for a car loan.
Lenders set age and condition limits, with some requiring the car to be no more than 10 to 12 years old at the end of the loan term, while others may accept up to 15 years old by that time. We work with lenders who can accept cars as old as 20 years or more by the end of the term.
Cars also lose value over time, so check that the loan won’t leave you owing more than the car is worth if you plan to sell it before the end of your term.
Personal loan secured by house
You may also be able to secure a personal loan against your home or the equity in it, which is the difference between what the property is worth and what you still owe on it. Property can often support a larger loan and a lower rate than other assets. The risk is that part or all of your home equity is on the line, so if you can’t repay, the lender can take and sell the asset.
Secured vs unsecured personal loans
The main difference between secured and unsecured personal loans is that secured loans are backed by an asset, while unsecured loans aren’t. Here are the key differences between the two:
| Secured personal loan | Unsecured personal loan | |
|---|---|---|
| Asset required | Yes | No |
| Interest rates | Usually lower | Usually higher |
| Maximum loan amount | Up to $100,000+ | Up to $75,000 |
| Maximum loan term | Seven years | Seven years |
| Lending options | Fewer | More |
| Approval speed | Can take longer, as the asset must be assessed | Often quicker, as there is no asset to assess |
| If you can’t repay | The lender may take and sell the asset | The lender can take legal action to recover the money |
How much will my personal loan cost?
The cost of a secured personal loan is the amount you borrow plus the interest and fees you pay over the loan term. What you pay depends on:
- Interest rate: the higher your rate, the more you’ll pay.
- Fees: these typically include application and ongoing fees, with early repayment charges less common for personal loans.
- Loan term: longer terms mean lower repayments but more interest overall.
- Loan amount: interest is charged on your balance, so borrowing more costs more.
- Extra repayments: these reduce your interest, as you’ll be cutting down your balance at a faster rate (provided your lender doesn’t charge a fee for them).
- Credit score and financial profile: lenders tend to offer lower rates to borrowers they see as lower risk, so a strong credit score and high, stable income can lead to a cheaper rate.
Case study: finding the right interest rate
Sam is borrowing $35,000 over five years with monthly repayments, secured against his car. He wants to see how much the interest rate changes the cost. He crunches the numbers to see what different rates will do for his personal loan each month and overall:
| Interest rate | Monthly repayment | Total interest | Total repaid |
|---|---|---|---|
| 7.50% p.a. | $701 | $7,080 | $42,080 |
| 8.50% p.a. | $718 | $8,085 | $43,085 |
| 9.50% p.a. | $735 | $9,104 | $44,104 |
| 10.50% p.a. | $752 | $10,137 | $45,137 |
| Figures are for illustrative purposes only, fees are excluded and rates aren’t guaranteed. Calculations based on a $35,000 loan repaid monthly over five years. | |||
Sam sees that even the jump from 7.50% p.a. to 8.50% p.a. costs him a touch over $1,000 across his five-year term, and at 10.50% p.a. he’d pay more than $3,000 extra. He also checks the comparison rate on each loan, which combines the interest rate and unconditional fees into a single percentage, so a low rate with high fees doesn’t catch him out.
Personal Loan Repayment Calculator
It’s important to have an idea of what your loan might cost you overall before you apply. Fortunately, Savvy’s personal loan calculator is simple to use and lets you know how much your repayments could be.
Your estimated repayments
$98.62
| Total interest paid: | Total amount to pay: |
| $1233.43 | $5,143.99 |
Can I get a secured personal loan with bad credit?
Yes, it may be possible to get a secured personal loan with bad credit. Offering an asset as security reduces the lender’s risk, which can improve your chances compared with an unsecured loan, though you’ll typically be offered a higher interest rate than someone with a strong credit history.
Lenders will still check your credit report for things like late or missed repayments, unpaid debts, recent applications and defaults. They’ll also look at your income, expenses and other debts. They can’t lend you money if they think you won’t be able to make the repayments. We work with lenders who can help people with a poor credit history access the funds they need.
Pros and cons of secured personal loans
Pros
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Lower interest rates
Because the lender has an asset to fall back on, secured loans usually come with lower rates than unsecured loans.
-
Higher borrowing limits
The value of your asset can let you borrow more than you could without security, with some lenders offering up to $100,000 and beyond.
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Better approval chances
Security can improve your chances of approval if your credit history isn’t perfect, though lenders will still check that you can afford the repayments.
Cons
-
Your asset is at risk
If you can’t repay, the lender may sell your asset, and you could still owe any shortfall.
-
Not all assets are accepted
Lenders set requirements for ownership, value, age and condition, so your asset needs to qualify.
-
Longer processing time
The lender needs to assess your asset as well as your finances, so approval can take longer than for an unsecured loan.
How to apply for a secured personal loan with Savvy
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Complete our application form
Tell us about your situation, the loan you’re after and your assets.
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Submit documents
We’ll need to verify your income and identity as part of the process to allow us to get to work.
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Chat to your broker
Your broker will give you a call and talk you through the options available to you.
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Have your application prepared
From there, we’ll prepare your application for formal submission with your lender.
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Approved and settled
Once approved, we’ll handle loan settlement and the funds can be sent straight to your account!
Secured personal loan eligibility and documentation
Eligibility
- You must be at least 18 years of age
- You must be an Australian citizen or permanent resident (or, in some cases, an eligible visa holder)
- You must be earning a stable income that meets your lender’s minimum threshold (this can start from as little as $480 per week)
- You must be employed on a permanent, casual or self-employed basis
- You must meet your lender’s minimum requirements related to your credit score
- Your asset must meet your lender’s qualification criteria in relation to type, age and condition
Documents
- Personal information, such as your full name, date of birth, address and contact details
- Photo ID, such as a driver’s licence or passport
- Your last two consecutive payslips (or your last tax return if you’re self-employed)
- Information about the assets you own (such as a car or house) and liabilities in your name (such as other loans)
- 90 days of bank statements may be requested, but not always
Should I take out a secured personal loan?
A secured personal loan is worth considering if you have an asset you’re comfortable putting up as security and you want a lower rate or a higher borrowing limit, but it may not suit you if the risk to your asset outweighs the savings.
A secured personal loan may suit you if:
- You own a car, property or other asset that a lender would accept as security
- You want a lower interest rate than an unsecured loan would offer
- You need to borrow more than unsecured lenders will usually provide
- You have a less-than-perfect credit history and an asset that could support your application
- You’re comfortable using a valuable asset as security and have a stable income that covers the repayments
A secured personal loan may not suit you if:
- You don’t have an asset, or yours is too old or low in value to qualify
- You’d struggle if the lender sold your asset to recover what you owe
- You only need a small amount, less than the value of your car or home equity
- You need the money quickly, as an unsecured loan can often be approved faster
