Not all personal and business loans are created equally, here's why!
- candice7664
- Jun 19
- 4 min read
When it comes to finance, it’s easy to assume that a loan is just a loan. You borrow the money, pay it back over time, and move on. Simple, right?
Well, not quite.
In reality, there are a few different types of loans available, and they’re all designed to suit different purposes. Choosing the wrong one can lead to unnecessary stress, extra interest, or loan terms that don’t match your needs.
When you understand how different loans work and what they are for, you can make confident decisions that support your financial goals, not derail them.
Let’s unpack the most common loan types we work with and help you find the one that fits you best.
Personal Loans
A personal loan is usually an unsecured loan, meaning you don’t need to offer up an asset like a car or other asset as security. These loans give you flexibility in how you use the funds, they are commonly used for things like holidays, home renovations, weddings, medical expenses, or even consolidating multiple debts into one.
Pros:
Use the funds for almost anything
No need for an asset to secure the loan
Often processed quickly
Cons:
Interest rates are generally higher than secured loans
You may be able to borrow less, depending on your credit history and income
When it’s a good fit:
If you’re after flexibility and don’t want to tie the loan to a specific asset, a personal loan can be a great solution. Just keep in mind that higher interest rates can add up over time, so it’s important to choose your loan amount wisely and stay on top of repayments.
Car Loans or Secured Personal Asset Loans
If you’re buying a car (or any asset with wheels), a car loan/secured personal asset loan is typically the way to go. This is a secured loan, where the car (or caravan, boat, motorbike etc) itself acts as collateral. Because the lender has security over the asset, they usually offer lower interest rates and longer repayment terms.
Pros:
Lower interest rates than unsecured loans
Potential for longer repayment terms
Balloon (residual) payment options available to lower your monthly repayment
Cons:
The car must usually meet lender criteria (e.g. under a certain age)
The car can be repossessed if you default on the loan
You may not be able to use the loan funds for anything else
When it’s a good fit:
Car loans are ideal if you’re purchasing a newer vehicle that fits the lender’s guidelines. They’re one of the most affordable ways to finance a car and often give you access to more competitive rates than a personal loan would.
Business Loans & Asset Finance
If you're buying equipment, a vehicle, or machinery for your business, asset finance is a tailored option designed to suit business needs. This type of finance can be structured to match your cash flow, with benefits that make it easier for self-employed borrowers and small business owners to grow sustainably. There are 2 main loan types under the business loan and Asset Finance banner and they are Chattel Mortgage/Hire Purchase or a Finance Lease.
Pros:
Structured repayments to match your cash flow (e.g. seasonal or low-doc)
Potential tax benefits through interest deductions and depreciation
Access to equipment or vehicles without using your working capital
Cons:
May involve more documentation for approval
Some lenders have stricter requirements around business use
When it’s a good fit:
If you’re a tradie, contractor, or business owner investing in tools, vehicles, or equipment, asset finance allows you to do so without draining your cash reserves. It’s also ideal for self-employed clients who might not tick every box for a traditional loan but still need smart, sustainable finance solutions.
It’s Not Just the Loan Type, Features Matter Too
The type of loan is only part of the equation. The features built into your loan can have a big impact on how flexible, affordable, and stress-free your loan is to manage.
Keep an eye out for:
Extra repayment options: Handy if you plan to pay the loan off early.
Fixed vs variable interest: Fixed offers certainty; variable can offer savings if rates drop.
Balloon/residual payments: Reduce monthly repayments with a lump sum due at the end.
When we recommend a loan to a client, we look beyond just the rate. We consider how the loan fits into your lifestyle and future plans. Because the right loan isn’t just the one that gets approved, it’s the one that works for you long term.
Why Getting It Right Matters
Let’s be real, taking out a loan isn’t just a financial decision. It impacts your day to day lifestyle, your stress levels, and your future goals. That’s why choosing the right type of loan from the start is so important.
Here’s what the wrong loan might look like:
Higher interest over time
Repayments that don’t fit your budget
Limited flexibility if life throws a curveball
Missed tax advantages if it’s a business purchase
On the flip side, the right loan:
Supports your goals
Feels manageable
Can actually save you money in the long run
That’s exactly where a broker makes a difference. At Inspired Asset Finance, we get to know you and your needs, then match you with a loan that ticks all the right boxes. We have access to multiple lenders, we know who’s flexible and who’s not, and we can often get deals that aren’t available if you walk into a bank on your own.
Do It the Inspired Way
Finance shouldn’t feel confusing or overwhelming. With the right lender, the right structure, and a team that genuinely cares about getting you the best outcome, the process becomes smoother, faster, and more empowering.
At Inspired Asset Finance, we believe in doing things differently, with heart, with knowledge, and with your goals front and centre.
Let’s find a loan that fits your lifestyle, your business, and your future. Let’s do it the Inspired way.
📞 Call us at 0439 698 123
📧 Email us at candice@inspiredassetfinance.com.au
🌐 Visit us at www.inspiredassetfinance.com.au
Candice @ Inspired Asset Finance
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