9 Types of personal loans to consider

If you’re a money-savvy individual with a good credit score, stellar repayment history and a chunk of surplus income, the world is your oyster. The lending world, that is.

What's in this guide?

Considering a personal loan?

So you need some capital to fund your next big money move? You’ve come to the right place. Before you hit submit on any applications, you should get acquainted with the various types of personal loans to determine which one is best for you.

Umm … what is a personal loan? 

A personal loan is a form of credit that a financial institution might lend to a person who wants to make a purchase but doesn't have the cash upfront. Every year thousands of Aussies rely on lenders to help them to pay for weddings, home renovations, buy a car and consolidate their debt.

Are there different types of personal loans?

The short answer is yes. Personal loans can vary not just by purpose, but the structure, conditions and features can be remarkably different from one financial product to another. In the following guide, we’ll run you through the most common forms of personal loans and what you can use them for.

Secured vs unsecured: What's the difference?

  • Secured

    You can think of a secured loan as a loan ‘with security’ – which means the asset you buy is used as a type of guarantee against the money you borrow from a lender. Secured personal loans are common when purchasing a new car because most of us can’t afford to buy a new ride with cash, right?. In most cases, the vehicle being purchased is put up as collateral in case you default on the loan. The same goes for when you take out a mortgage – if you decide to flee the country, the lender may be allowed to take ownership of your house and sell it to recoup the cost.

  • Unsecured

    These loans are common for purchases where a loan cannot be secured by an asset. 

    Unsecured personal loans can be used for a nearly infinite range of purposes. Below, we outline some common ones that we see.

At Wisr, we provide personal loans for any worthwhile purpose. If that sounds vague, it’s supposed to. Wisr personal loans can be used for a whole range of purchases, including cars, home renovations and holidays. Wisr customers have even taken out loans to adopt a puppy or get their teeth straightened. You can see a list of the most common loan purposes on our dedicated loans page. Don't see something that fits your purchase? Get in touch! We're always keen to find a tailor-made solution for our customers.

Car loans

New and used cars are more expensive than ever, so buying one outright isn’t always an option. That’s where car loans can come in handy. According to Savvy, the average weekly car loan repayment in Australia is $166 a week and the average spend on a new car is $40,729. 

Car loans are often secured, so your car is put up as security in case you default on the loan. This allows you to buy the car you want now and pay it off over time. Because you’re providing that security against the loan, you may be able to get a lower interest rate than an unsecured loan.
Want to know more? Read more about Wisr’s car loans.

Wedding loans

Need a little help getting down the aisle? You might consider taking out a personal loan to help you pay your wedding off over time. Married life ain’t cheap, Moneysmart found the average Australian wedding costs between $36,000 to $53,000.

The micro-wedding trend is gaining momentum and elopements are now commonplace, giving couples an excellent excuse to keep things intimate and affordable. But if you have your heart set on a big wedding and are comfortable paying a little extra for the privilege of making it happen sooner, a wedding loan could be a great option.

Find out more about Wisr Wedding Loans.

Home renovation loans

Refurb on the mind? Your first instinct might be to refinance your home loan in order to finance your renovation. But when that’s not an option, a personal loan might be your next best bet. It’s almost certainly a smarter option than chucking every Bunnings trip on your credit card! A home renovation loan allows you to borrow a set amount to fund your big project and pay it off over time. You might use the funds to purchase building materials, rent tools or hire professionals to get the job done. 

Curious? Find out about Wisr’s home renovation loans.

Debt consolidation loans

One of the most common loan purposes we see is debt consolidation. This allows you to roll your high-interest debts into one simple loan. Juggling multiple repayments with mounting interest can be incredibly stressful and can make getting back on top feel impossible. A consolidation loan streamlines all those debts into one place with one regular repayment, often with a far lower interest rate. This can alleviate a lot of stress and save you money long term. 

Debt consolidation loans can be used more all sorts of debts – credit cards, high-interest personal loans, car loans, and more. They also provide a clear path to becoming debt-free. If you stay on top of your repayments, you’ll know the exact date that you’ll hit that glorious $0 balance. Debt can feel like a black hole, but a consolidation loan can help break through the darkness and give you a bit of light at the end of the tunnel.

Find out more about consolidating your debt with Wisr.

Travel loans

It’s a big, beautiful world out there waiting to be explored. But it’s not always possible to save up the cash to take your dream trip. A better option for you might be to take out a travel loan to take your trip and pay it back over a couple of years. A travel loan can also help you out if you’re in a sticky situation. For example, if you find yourself in the midst of a global pandemic and the price of a flight home quadruples overnight. 

The main benefit of using a personal loan rather than a credit card? Two words: interest rate. Credit cards typically have higher rates than personal loans, so your trip could end up costing you more in the long run. With a travel loan, you’ll know exactly what your regular repayments are so you can factor them into your budget.

Got the travel bug? Find out where a Wisr travel loan could take you.

Recreational loans

A recreational loan is exactly what it sounds like – funding for the fun stuff! If you’re dreaming of a new boat jet-ski, motorbike or caravan, a recreational loan might help you make it happen. Most lenders will have their own criteria for what you can use a recreational loan for, so it’s a good idea to familiarise yourself with the eligibility criteria before you hit submit on an application. 

Learn more about Wisr’s recreational loans.

Green loans

Want to get some solar on your roof or upgrade your heating? If you’re ready to make a positive impact, get things rolling with a green loan. 

Your purchase will need to meet a few energy efficiency and performance standards to be eligible for this type of loan, so do your research and get in touch with your lender to find out what’s covered. 

Keen to go green? Read up on Wisr’s green loans.

A note on responsible borrowing

“Just because you can, doesn’t mean you should.” This common saying has myriad applications but should be heeded, especially in the case of borrowing credit. Just because a lender is willing to offer you an exorbitant amount of money doesn't mean you should borrow it. The same goes for credit cards – just because your credit limit is $50,000 doesn’t mean you should max it out on a round-the-world vacation.


What is a personal loan?

A form of credit that allows you to get what you want now and pay the money back over time with interest.

What types of personal loans are available?

Depending on your eligibility, you can get a personal loan for almost anything. The most common purposes include buying a car, consolidating debt, and funding a holiday or wedding. 

Are there any types of personal loans I should avoid?

High-interest, low-value loans such as payday loans leave a nasty mark on your credit report and can set you up for failure, giving you an unreasonable timeframe to repay your debt. These should be avoided, if possible.


Does applying for a personal loan affect my credit scores?

Yes, when you apply for a credit product, a hard enquiry is recorded on your credit file. This will temporarily impact your scores. With good credit behaviour, your scores will improve over time. 

What kind of interest rate can I expect to receive for a personal loan?

How long is a piece of string? Personal loan rates vary significantly between lenders. They can also largely depend on your own credit history. If your credit score is looking a little worse for wear, you may be hit with a higher interest rate to compensate for the added risk associated with lending you money. Interest rates will also change depending on how the economy is travelling. When the Reserve Bank increases its rates, that change will likely be passed on to borrowers. 

Is a personal loan better than a credit card?

Credit cards can certainly serve a purpose, but they often come with high-interest rates and inflexible terms. A personal loan, on the other hand, can attract a lower interest rate and is better suited to a one-off purchase that you’re prepared to pay off over time.

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Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.

James is a marketing and communications professional with a passion for leading high-performance teams. He likes what he does… a lot.

James, Chief Growth Officer