Personal Finance

Unsecured Loan

What is an unsecured loan?

An unsecured loan is a short-term loan that you can use for almost any purpose, including buying a car, boat, caravan, or motorcycle.

The lender gives you the funds and you agree to make regular repayments over the life of the loan. An unsecured loan doesn’t use your vehicle as collateral, so you own it outright from the beginning.

What are the benefits?

An unsecured loan puts no restriction on how you use the funds. That makes it a good option if you’re looking to purchase an older or vintage vehicle that doesn’t meet normal lending criteria. An unsecured loan can also help pay for your registration, insurance, or that fancy after-market stereo system.

Features of an unsecured loan
  • New or used vehicles
  • Flexible loan terms, from 1-7 years
  • No security required
  • Fixed or variable interest rates
  • Weekly, fortnightly, or monthly repayments.

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Any calculation made using this repayments calculator is intended for illustrative purposes only. The calculator does not take establishment fees, stamp duty, or other government charges into account. Any calculations made should not be relied upon for the purposes of deciding whether to apply for a loan.

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Common questions about Unsecured Loan

To qualify for an unsecured loan, you must be:

  • At least 18 years of age
  • An Australian citizen or permanent resident
  • Receiving a regular income
  • Purchasing a vehicle for personal use.

Most lenders apply more stringent lending criteria to unsecured loans, so you need to have a relatively clean credit record. But don’t worry, Oxcel has plenty of other options for people with a poor credit history.

Unsecured loans pose a greater risk to the lender, so they usually attract higher interest rates. In Australia, personal loan interest rates currently range from around 5% to 21%. Your interest rate will depend on your choice of lender, as well as:

  • The loan amount and term
  • Whether your loan has a fixed or variable interest rate
  • Your credit history
  • Your financial position (e.g., savings, outstanding debts).

The lowest interest rates are offered to borrowers with a clean credit record, stable employment, and a high income.

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