Secured and unsecured personal loans: What’s the Difference?

 

Personal loans are taken for multiple purposes. It is a good choice for small and large expenses. When you need funds, you can always avail of a personal loan. However, there are two very common types of personal loans: secured and unsecured personal loans. Yes, you can always go for a secured or unsecured personal loan from banks and non-banking financial institutions. It is important that you choose the best kind of loan depending on your needs and emergencies. If you are planning to get an instant personal loan online, here’s all you need to know about secured and unsecured loans.

What is a secured loan?

A secured personal loan is one that involves collateral or security. When a borrower takes out a secured loan, he or she pledges a property to the bank or other non-banking financial institution. Therefore, when the individual is not able to complete the loan repayment, the outstanding amount is recovered from the collateral or security.

Features of a secured loan

●        Secured loans are very easy to get. It is very easy to get a secured loan. Since it involves security or collateral, you can always get a secured loan.

●        There is no need for any eligibility criteria. It is not very important to meet the eligibility since you are pledging the collateral from which the loan provider is able to recover the outstanding amount of the loan.

●        The rate of interest is always very low on a secured loan. Yes, you can always get an affordable loan when you secure it. Since there is no risk in it, you can get a low rate of interest, which makes the loan cost very affordable.

What is an unsecured loan?

Personal loans are generally unsecured. There is no collateral or security pledged on the personal loan. You need to meet the eligibility criteria in order to get an unsecured personal loan.

Features of an Unsecured Personal Loan

●        Unsecured loans need a lot of eligibility criteria. It is important to meet the credit score and income requirements in order to get a personal loan.

●        The rate of interest is high, and you need to make sure that you look for a loan provider to get a personal loan.

Wrapping up                                  

You can do a smooth and hassle-free personal loan online apply with Clix Capital. You will be able to get an affordable personal loan interest rate with this leading platform.

Also Read: How the Personal Loan Space Has Evolved Over the Years