A secured loan uses collateral, like property or savings, to guarantee repayment. If the borrower doesn't pay back the loan, the lender can take the collateral. This lowers the lender's risk, so secured loans usually have lower interest rates than unsecured loans.
Because the loan is backed by collateral, lenders typically offer lower interest rates.
You may be eligible for a larger loan amount.
An unsecured loan is a loan you get without needing to offer any property or savings as security. It's given based on your credit score and financial history. These loans often have higher interest rates because they are riskier for lenders.
You don’t risk losing assets if you’re unable to repay the loan.
The approval process is usually faster since there is no need to evaluate collateral.
Consider a Secured Loan if you have valuable assets you can use as collateral and you want to benefit from lower interest rates and higher loan amounts.
Opt for an Unsecured Loan if you prefer not to risk your assets and want a quicker, simpler loan process, despite potentially higher interest rates.