Secured Personal Loans from 6.99% p.a.

How Secured Personal Loans Work

A secured personal loan works the same as any other personal loan — you borrow a fixed amount and repay it in regular instalments over an agreed term. The difference is that you offer an asset you own (or are purchasing) as security for the loan. This security gives the lender a fallback if the loan is not repaid, which significantly reduces their risk.

Lower risk for the lender translates directly to lower interest rates for you. The mathematics are straightforward: if an unsecured personal loan at a given lender is 9.99% p.a., the secured version of that same product might be 6.99-7.99% p.a. The difference might seem modest as a percentage, but it adds up substantially over the life of a loan.

On a $30,000 loan over 5 years, the difference between 9.99% and 6.99% is approximately $2,478 in total interest saved. On a $50,000 loan over 7 years, the saving grows to over $5,500. For borrowers using personal loans for significant purposes like debt consolidation, home renovations, or medical procedures, these savings are meaningful.

Accepted Security Types and How They Are Valued

Understanding what you can offer as security and how lenders value it helps you maximise the benefit of a secured loan. Here is a detailed breakdown of the most common security types:

Motor vehicles (most popular): Cars, utes, vans, and motorcycles are the most widely accepted form of personal loan security. Lenders typically accept vehicles up to 10-12 years old at the end of the loan term (so a 7-year-old car could secure a 3-5 year loan). The vehicle is valued using industry tools like Glass's Guide or RedBook, and you can typically borrow up to 100% of the assessed value. You keep driving the car as normal — the lender simply registers their interest on the PPSR (Personal Property Securities Register).

Boats and marine vessels: Recreational boats, jetskis, and marine equipment can secure personal loans. Valuations are based on market guides and condition, and lending ratios are typically 80-90% of assessed value due to the more volatile resale market for marine assets.

Caravans, campervans, and trailers: With the growth of caravan and camping culture in Australia, these assets are increasingly accepted as security. Newer, brand-name caravans (Jayco, Coachman, etc.) are preferred by lenders.

Term deposits: If you have a term deposit with a bank, you can sometimes use it as security for a personal loan while keeping the deposit earning interest. This can result in very low net borrowing costs if the term deposit rate is close to the loan rate.

Secured vs Unsecured: Making the Right Choice

Choosing between secured and unsecured comes down to weighing the rate advantage against the requirements and implications of providing security. Here is an honest comparison:

Choose secured if: you own a suitable asset outright (no existing finance on it), you are borrowing $10,000+ where the interest savings become substantial, you want access to higher borrowing limits, or you have imperfect credit and need to offset the risk with an asset to access a reasonable rate. The process is slightly longer as the asset needs to be valued and the security registered, but the savings typically justify the small additional effort.

Choose unsecured if: you do not own a suitable asset, you need funds urgently and cannot wait for the asset valuation process (usually 1-2 extra days), you are borrowing a smaller amount (under $5,000-$10,000) where the interest savings are modest, or you prefer the simplicity of not having an asset tied to a loan. Learn more about unsecured personal loans.

The PPSR and What Security Registration Means

When you use an asset as security for a loan, the lender registers their security interest on the Personal Property Securities Register (PPSR). This is a federal government register that records security interests over personal property (not real estate — that uses different systems).

Registration means the lender has a legal claim over the asset until the loan is fully repaid. In practical terms, this means you cannot sell the asset without the lender's consent (the buyer would see the registration when doing a PPSR check), and if you defaulted on the loan after all other remedies were exhausted, the lender could repossess the asset.

Once you pay off the loan in full, the lender is required by law to remove the PPSR registration within a specified timeframe. You then have clear, unencumbered title to your asset again. The process is automatic and handled by the lender — you do not need to do anything.

It is worth noting that PPSR registration is standard practice for any secured lending in Australia and is not something to be concerned about. It simply formalises the arrangement and protects both parties.