Is Your Asset Worth Pledging? Find Out in Seconds.
Secured and unsecured personal loans are not the same product with different names — they are structurally different, and the cost difference can run to thousands of dollars. This calculator places both side by side so you can see the exact dollar saving on interest, total cost, and repayments for your specific loan scenario.
Who this calculator is for
- Borrowers who own a vehicle, term deposit, motorcycle, boat, or caravan and want to know whether pledging it as collateral meaningfully reduces their loan cost.
- Car buyers deciding whether to use the vehicle itself as security on a car loan — the most common secured personal loan structure in Australia.
- Anyone who has been quoted both a secured and an unsecured rate and wants to compare the total cost difference across the full term.
What it calculates
- Side-by-side repayment (weekly, fortnightly, or monthly) for secured and unsecured scenarios.
- Total interest paid over the full term for each option.
- Total cost including all fees (upfront and ongoing) for each option.
- Dollar saving on interest and per-period repayment saving by choosing secured.
Why it matters
The rate gap between secured and unsecured personal loans in Australia typically runs from 2% to 8% p.a. On a $20,000 loan over 5 years, that gap translates to $2,000–$5,000 in additional interest — money that leaves your account in repayments and never comes back. Most borrowers focus on the monthly repayment, while the cumulative cost gap quietly compounds.
Secured
Unsecured
Side-by-Side
Interest saving with Secured
$1,397 (43.8%)
That's $39 less per month
Numbers don't lie. Your lender might.
Now that you can see the difference, find a loan that matches. Compare real secured and unsecured personal loan rates from Australian lenders — updated daily.
How this Secured vs Unsecured Calculator works
This calculator takes your loan amount and preferred term and runs the numbers twice — once as a secured loan, once as unsecured — then places the results side by side. The underlying mathematics is standard loan amortisation, applied twice with two different interest rates.
For each scenario, the calculator determines a periodic interest rate using compound-equivalent conversion. It then applies the standard annuity formula to determine the fixed periodic repayment:
PMT = P × r / (1 − (1 + r)−n)
where P is the loan amount, r is the periodic rate, and n is the number of payments. Total amount repaid equals PMT × n; total interest is that figure minus the original principal. This is the same method Australian lenders use for repayment schedules.
Fees layered separately. Upfront fees are added once to total cost. Monthly fees are multiplied by the number of months in the term — regardless of repayment frequency — because they're typically fixed account-keeping charges. A $10/month fee on a 5-year loan costs $600 total whether you repay weekly, fortnightly, or monthly.
Repayment frequency conversion. Switching to fortnightly produces 26 payments per year — equivalent to 13 monthly payments — which accelerates principal reduction and slightly lowers total interest. Modest on shorter loans, meaningful on terms of 5 years or more. The rate displayed is always nominal annual; the calculator handles conversion transparently.
Default rates. The 7.49% secured / 12.99% unsecured defaults are indicative May 2026 market rates, not quotes. Replace them with rates from actual lender quotes for an accurate comparison — most Australian lenders provide indicative rates online without triggering a hard credit enquiry.
How to interpret your results
- Large interest saving (over $1,000) — strong case for secured. Most common on larger loans (above $15,000) or longer terms (5+ years). A $50,000 loan over 7 years at a 5% rate gap produces over $9,000 in additional interest on the unsecured option — unambiguous.
- Moderate saving ($500–$1,000) — weigh the practicalities. Secured is cheaper, but the margin is thinner. Is the asset readily available and eligible? Are you comfortable with the lender holding a security interest? Would PPSR or establishment fees ($100–$500) erode the saving?
- Small saving (under $500) — simplicity may be worth the premium. On shorter terms (1–2 years) or smaller amounts (under $5,000), the rate difference doesn't compound enough. The flexibility of unsecured may be worth the extra cost.
- Secured costs more than unsecured — check the inputs. Uncommon but possible if the secured option carries high establishment fees and the rate advantage is small. Revisit the fee section and verify the rates.
- Both columns identical — rates are the same. In practice, secured and unsecured rates are almost never identical for the same borrower. Adjust the secured rate downward — 2–5% lower than unsecured is typical.
How to find repayments that fit
- Get actual quotes from at least two lenders for each option. Many Australian lenders provide indicative rates online without a hard credit enquiry. Replace the defaults with real rates for a precise comparison.
- Factor in your asset before committing to secured. Eligible assets typically include vehicles under 10–12 years old, term deposits, and some investment assets. The asset must usually be worth more than the loan amount. PPSR registration costs $6–$10.
- Test different terms to find the real break point. The secured saving grows on longer terms because the rate difference has more periods to compound. If the saving looks small on 3 years, try 5 or 7.
- Expand the fees section and enter actual fees. Some secured loans carry $200–$600 in establishment fees. A secured loan with $400 in extra fees but a 3% rate advantage will still beat unsecured on almost any loan above $10,000 over 3+ years — but only the calculator confirms it.
- Redirect the per-period saving into extra repayments. If you save $50/month on the secured option, direct it to extra repayments to compound the benefit. Use the Extra Repayments Calculator to model this.
- Consider risk tolerance honestly. If you pledge your car and miss repayments, the lender can repossess it under the National Credit Code. If your income is volatile or irregular, the security-free flexibility of unsecured may be worth the higher rate.
Example Secured vs Unsecured Calculations in Australia
Four common loan scenarios at indicative May 2026 rates. All assume monthly repayments and no additional fees.
| Loan Amount | Term | Secured Rate | Unsecured Rate | Secured Monthly | Unsecured Monthly | Interest Saving |
|---|---|---|---|---|---|---|
| $10,000 | 3 years | 7.49% | 12.99% | $311.34 | $336.38 | $901 |
| $20,000 | 5 years | 7.49% | 12.99% | $400.76 | $455.89 | $3,308 |
| $35,000 | 5 years | 7.49% | 12.99% | $701.33 | $798.30 | $5,789 |
| $50,000 | 7 years | 7.49% | 12.99% | $760.38 | $896.22 | $11,413 |
Assumptions
- Rates indicative as of May 2026, not quotes — actual rates vary by lender, credit profile, and loan specifics.
- All calculations use standard loan amortisation (compound-equivalent monthly rate conversion).
- No upfront or ongoing fees included — expand the fees section to add lender-specific fees.
- Repayments are monthly; fortnightly or weekly will produce slightly lower total interest.
- Figures rounded to the nearest dollar except repayments (two decimal places).
Calculator assumptions
This calculator uses standard loan amortisation mathematics to produce illustrative comparisons. The pre-filled rates (7.49% secured, 12.99% unsecured) reflect indicative market conditions as of May 2026, based on data from 30+ lenders monitored by LoanGorilla. They are not quotes — your actual rate will vary depending on credit score, employment, income, lender, and the asset being secured. Replace defaults with rates from actual quotes for the most accurate result. The calculator does not account for redraw facilities, offset accounts, or variable rate changes — it assumes a fixed rate for the full duration. It also assumes no early repayment fees, which some lenders do charge. PPSR registration fees ($6–$10) and lender establishment fees are not included by default — use the optional fees section. All figures in AUD as at May 2026. Reviewed by the LoanGorilla editorial team — last updated May 2026.