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

At NZCU Baywide we offer New Zealanders both secured and unsecured personal loans to ensure that, no matter your financial situation, you’re able to obtain the deal that will help you to develop a better financial life. So whether you plan to buy 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 does not require the borrower (you) to provide any form of collateral or security to be held against the value of the borrowing. Typically, this form of 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 rates in New Zealand, starting from just 11.9%p.a.*

What is a secured loan?

Unlike an unsecured finance, 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. 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 it is paid off in full.

In this case, this asset acts as a security, which often means you’re more likely to get approval. It 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 rates in New Zealand, starting from just 9.9% p.a.*.

Which type of lending 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 lending), 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 deal you ultimately decide on with NZCU Baywide you can be sure you’re receiving a competitive rate for both secured and unsecured loan options.

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