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Secured vs Unsecured Loan Calculator

Calculator

Compare secured and unsecured personal loans to see if using collateral saves you money

Free to useNo data storedAI insightsUpdated: February 2026

Should you secure your personal loan with collateral? This calculator compares secured vs unsecured loan options, showing you exactly how much you could save by using your car, savings, or other assets as security.

Enter Your Details

Enter Your Details

$

How much do you need to borrow?

How long to repay the loan

%

Rate for a loan without collateral

%

Rate when using collateral (usually 3-5% lower)

$

Value of the asset you'd use as security

Real-World Examples

Using Savings as Security

Lisa has $20,000 in term deposits earning 4% and needs a $15,000 loan.

Inputs:

amount:15,000unsecuredRate:11securedRate:6
Securing the loan saves $1,900 in interest. Her term deposit still earns interest, so net benefit is even higher.

Car as Collateral

Marcus has a car worth $18,000 and needs $12,000 for home renovations.

Inputs:

amount:12,000unsecuredRate:13securedRate:8
Saving $1,500 is significant, but he must maintain comprehensive insurance and risks losing his car if he defaults.

Frequently Asked Questions

Glossary

Secured Loan
A loan backed by an asset (collateral) that the lender can claim if you default.
Unsecured Loan
A loan based solely on your creditworthiness, with no asset backing.
Collateral
An asset pledged as security for a loan - commonly savings, term deposits, or vehicles.
Loan-to-Value Ratio (LVR)
The loan amount as a percentage of the collateral value. Lower LVR = lower risk = better rates.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026

How to Use
  1. Enter the loan amount you need
  2. Set your preferred loan term
  3. Add the unsecured rate you've been quoted
  4. Enter the secured rate available with collateral
  5. Select your collateral type and value
Key Information
  • Secured loans typically have rates 3-5% lower than unsecured
  • Using savings as collateral can get rates as low as 5-6%
  • Your collateral must be worth more than the loan amount
  • If you default, you risk losing your collateral
Pro Tips
  • Term deposits are the safest collateral - you keep earning interest while using it as security
  • Vehicle-secured loans require comprehensive insurance, factor this cost in
  • Even partial security can reduce your rate - ask lenders about this option
  • If your savings earn less than the rate difference, securing makes sense
Avoid These Mistakes
  • Not considering the risk of losing your car or savings if you can't repay
  • Forgetting additional costs like asset valuation fees or insurance
  • Using an asset you might need to sell during the loan term
  • Overvaluing your collateral - lenders use market value, not sentimental value
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