Find out what is a Secured Loan

What Is A Secured Loan?

If you plan to get a loan, it is important to know what is a secured loan versus an unsecured loan so you can choose the ideal type for you.

When deciding where to get a loan, it is also important to go for a lender who can give you different loan options to suit your unique situation. There are many lenders in Australia, but you should go for a truly reputable and trustworthy company.

SocietyOne is a leading online lending platform for Australians. We have helped thousands bridge their financial gaps by providing low-interest personal loans tailored to their needs and preferences. Our service-minded team has also provided many Australians with answers to questions like ‘What is a secured loan?’ and how it can help them – our lines are open for any inquiries you may have for us.

To better understand what is a secured loan, read on to learn the difference between secured and unsecured loans, the loan process, and the loan rates.

What is the difference between secured and unsecured loans?

What is a secured loan? It is a loan taken against collateral, such as a home or car. Loan companies may repossess the collateral if the borrower fails to repay the loan.

On the other hand, you can take an unsecured loan without any type of collateral, given that you qualify for it. If you have good credit and don’t want to pledge collateral to your loan, then an unsecured loan may be ideal.

Because there is less risk in a secured loan for lenders, you can usually borrow a bigger amount. With SocietyOne, you can borrow up to $50,000 with unsecured loans and repay it in two, three, or five years. For secured loans, you can borrow as much as $70,000, payable over two, three, five, or seven years.

For secured and unsecured loans, borrowers with good credit scores are usually preferred by lenders. If you don’t know your credit score, you can view it for free on our platform. We’ve partnered with Experian, an official credit reporting agency, to provide insight into your credit profile. In addition, you can learn useful tips on improving your score when you join our Credit Score Club. You can track your score progress on our website or download the SocietyOne app.

Are secured loans more difficult to get?

Many people who ask, ‘What is a secured loan?’ also wonder if it is easier to get one compared to an unsecured loan.

Generally, it is easier to get approved for a secured loan. By putting up an asset as collateral, the lender may see you as less of a risk, and they won’t have to rely solely on your credit history or score for your appraisal. Secured loans are also ideal if you are still building your credit score since the collateral improves your chances of approval.

On the other hand, since you don’t have to provide asset information with unsecured loans, the application and assessment may be processed faster, especially with certain lenders.

SocietyOne has a streamlined loaning process, allowing you to receive your funds in as little as one business day upon approval, regardless of your loan type. You can apply from anywhere in Australia since our process is completely online. It’s easy – get a personalised loan rate, complete your online application, and wait for your loan approval.

Do unsecured loans have lower interest rates?

Because the collateral decreases the risk, lenders typically reward you with lower interest rates with secured loans. However, apart from the interest rate, other factors may affect the true cost of the loan, such as your loan amount, repayment frequency, and terms. You can still get great deals for both unsecured and secured loans under the right lender.

SocietyOne guarantees you a fair deal as we calculate your interest rate based on risk – the better your credit profile is, the better the loan offer we can give you. On our platform, you can get an estimate of your monthly repayments by simply inputting information – such as your desired loan amount, loan type, repayment frequency, loan term, and credit history – on our online loan calculator.

We also don’t charge monthly or early repayment fees, so you can settle your loan whenever you are ready. All you need to qualify for a SocietyOne loan is to be at least eighteen years old, an Australian citizen or permanent resident, earning more than $30,000 per annum, and with a good credit history.

To apply for a secured or unsecured personal loan with SocietyOne, prepare the following:

• Personal documents with your name, address, and date of birth
• Driver’s licence or passport
• Proof of address, such as a utility bill
• Proof of income, such as a payslip or bank statement
• Details about your daily expenses or other debts

If you plan to get a secured loan at SocietyOne, some examples of assets you may pledge as security are vehicles, motorbikes, boats, and personal watercraft. Please be prepared to supply asset details, proof of ownership or purchase invoice, and insurance as part of the verification process.

We also have other personal loan options such as debt consolidation loans, green loans, motorbike loans, holiday loans, and personal student loans.

If you have more questions related to ‘What is a secured loan?’ you can explore the SocietyOne platform or contact our team via email or call for more information. Submit your loan application today!