Unsecured or Secured Loans – Which One Is The One Me
One of the greatest things about personal loans is the fact that you can use them for anything that you would like. You can add a swimming pool to your home. You can purchase a car, or you can make some much needed home improvements. You can also use a personal loan to pay off all of your existing debt and consolidate it into one easy to remember payment. Personal loans sound like a great idea, don’t they? There are two very different types of personal loans on the market today, and Personal-Loans.com wants you to understand the difference in each type.
Unsecured Personal Loans
What is an unsecured personal loan? This is the first question that everyone has on their mind, and the answer is simple. An unsecured personal loan will require no type of down payment or collateral in order to secure the loan.
Unsecured personal loans are a little more difficult to secure. Being that there is nothing in place to secure the loan, lenders will require a much higher credit score in order to secure this type of personal loan.
The simple fact that there is no collateral required for this type of loan makes it very popular, but there are a few downsides to this type of loan as well.
Unsecured loans are more difficult to secure, they have smaller loan amounts, and they usually have a higher interest rate.
Secured Personal loans
Secured loans are the exact opposite in almost every single way. With a secured loan, you will be required to have some sort of collateral in order to secure the loan. This could come in the form of a down payment, cash, a car, or even your home. Some people are not very comfortable offering up some of their assets as collateral for this type of loan.
On a positive note, secured loans have many benefits over an unsecured loan. They are often much easier to secure because lenders have some sort of collateral to fall back on. Secured loans will often have a much lower interest rate as well. Again, the additional collateral helps keep the interest rates lower. Secured loans are generally available in much higher loan amounts too.
Here is a quick recap of the pros and cons of each type of personal loan.
• No collateral required
• Higher interest rates
• Harder to obtain
• Smaller loan amount
• Down payment or collateral will be required
• Easier to obtain
• Lower interest rate
• Higher loan amounts
Understanding the difference in these two very different types of personal loans can make it much easier to decide which type of personal loan is best suited for your specific needs.
Personal-Loans.com makes it easy for anyone to apply and get approved for each type of loan. In less than three minutes you can be approved, and in most cases, you will have the money from your personal loan in under 24 hours.