One of the main difference between a loan that is secured and an unsecured loan is that a secured loan is usually obtained with the provision of collateral or asset while an unsecured loan does not require any asset.

A Secured Loan

This loans usually have assets or collateral given as supports to it. For instance to obtain a mortgage loan, a house is usually given for support as well as a car to obtain an auto loan. Note that failure to meet up with the  loan payments, the asset you provide will be repossessed by the  lender.

An Unsecured Loans

Unlike a secured loan, an unsecured loan works totally different. An unsecured loan does not require the provision of collateral or asset.

Your assets can not be tampered by the lender on account of failure to pay the loan. Unsecured loans involves Personal and student loans

The requirements for an unsecured loans is simply to have a good credit history and strong stable income.

Although the unsecured loan might be small in amount compared to a secured loan since there are no collateral involved and ones assets can not be seized.

Would a secured loan be better?

Sometimes it’s surprising when people prefer to go for a secured loan but if you really check to know why you would realize most of them have bad credit history.

Their credit card wouldn’t allow them to obtain an unsecured loan as that’s one of the core requirements for an unsecured loan.

Most lenders even prefer a secured loan because as they can easily lay hold of your asset on the account of your failure to pay up the loan.

With Secured loans, borrowers have the opportunity to obtain approval  for much higher loan limits.

In choosing a secured loan, there are variables that you must be familiar with things like  the interest rate, repayment period, and monthly payment amount.