Unsecured or secured personal loans - what’s the difference?

At NZCU Baywide we offer both secured and unsecured personal loans to ensure that, no matter your financial situation, you’re able to obtain the loan that could be your ticket to a better financial life. So whether you plan to use your new loan for a car, to travel the world, or to remove the daily stresses and consolidate your debts, we have an option that suits you.

So what’s the difference between these two types of personal finance options? And which is best for you? Read on as we explore your options below:

What is an unsecured loan?

An unsecured loan is a type of personal loan that does not require the borrower (you) to provide any form of collateral or security to be held against the value of the loan. Typically, this form of unsecured finance is offered in a smaller amount than a secured loan, but is charged at a higher interest rate in order to cover the lack of collateral.

In the case of NZCU Baywide, however, we’re proud to offer some of the most competitive unsecured loans in New Zealand, starting from just 11.9%p.a.*

What is a secured loan?

Unlike an unsecured loan, a secured loan requires the borrower (you) to offer some form of asset, such as a home, vehicle or a boat, which is then used as collateral for the loan. Think of it in the same way as lodging a bond when you rent a property. Interest in items that are taken as security are then registered on the Personal Property Security Register (PPSR), until the loan is paid off in full.

In this case, this asset acts as a security, which often means you’re more likely to qualify for the loan, allows you to borrow a larger amount, and also lets us (the lender) offer you a lower rate of interest on the loan itself as there is less risk involved.

This allows us to offer some of the most competitive secured loans in New Zealand, starting from just 9.9% p.a.*.

Which personal loan is right for me?

At the end of the day, which loan is best for you depends on your current financial situation, as well as numerous other factors such as which assets you can use as security (in the case of a secured personal loan), whether you have good or bad credit, as well as your credit score. Each of these factors should be taken into account before you make your decision, as they’ll all influence your application, the amount you can borrow, as well as the interest rate you’ll pay.

No matter what type of personal loan you ultimately decide on - be it a travel loan, a debt consolidation loan or a home improvement loan - with NZCU Baywide you can be sure you’re receiving the best loan for you, with a competitive range of both secured and unsecured loans on offer.

Are you interested in a personal loan from NZCU Baywide? Use our personal loan calculator and apply online for your personal loan today.


Want to know your options?

Use our loan calculator