Secured and unsecured loans are types of personal loans. The secured loans are differing from the unsecured loans. The major differences between secured loans and unsecured loans are:
In secured loans, the lending institutions require some guarantee and security from the barrower. The guarantee might be some asset like home, car, property, and building. If you are failing to repay the loan, the lending institutions seize these assets and recover their losses. Where as in unsecured loans, the lending institutions does not requires guarantee and security.
Another difference between secured loan and unsecured loans are repayment period. Most of the unsecured loans offer repayment period up to five years. Unsecured loans offer small amount of money when compared to secure loans. The interest rates are high in unsecured loans when compare to Secured loans. Whether the secured or unsecured loan, you need to make sure the repayment of money that you barrowed. If you fail to repay the loan amount, you can loose your property and have negative impact on your credit. A negative credit score can impact chances of getting new credit.
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