There are essentially two types of personal loans.
Quite simply, a secured personal loan is backed by some 'security'. Just like a home usually forms the security for a home loan, secured personal loans are attached to some other kind of personal property, such as a car. A car loan is therefore a type of secured personal loan (see
here for more information about car loans).
Personal loans in general have higher interest rates attached to them than home loans do, primarily because the security offered is less valuable (and stable) than property, making them a higher risk for the lender. They are usually taken over relatively short loan terms - up to five years, in order to ensure the loan is paid off before its security loses its value (as a car would, for example).
One benefit of a secured personal loan is that in most cases it is possible to borrow up to 100% of the value of the security you are offering.
As the name suggests, unsecured personal loans do not have a security supporting them. They are based entirely on your eligibility as a borrower, so you yourself (and your ability to earn income) are the lender's only security that the loan will be repaid.
They operate similarly to secured personal loans, with similar loan terms (usually up to five years), but considerably higher interest rates to allow for the risk of lending without a security.
Personal loans can be put towards any number of purposes, be it consolidating credit card debts, funding an overseas holiday, helping pay for a wedding or buying new furniture. They are usually limited to a maximum of $50,000, although the norm is closer to $20,000.
Please contact us if you would like more information or are unsure whether a personal loan will suit your circumstances.