Secured Loan:<\/u>\u00a0<\/b><\/p>

A loan is backed by collateral which is an asset belonging to the borrower that the lender can seize if the borrower is unable to pay the loan obligations.\u00a0<\/b><\/p>

Once the loan is paid in full along with the interest rate charged, the borrower owns the collateral clean and clear.\u00a0<\/b><\/p>

However, if you are unable to make the monthly payment on the loan the lender or the bank can seize your asset to recover the balance loan amount.\u00a0<\/b><\/p>

The interest rates charged by the lenders or banks on these types of loans are lower compared to any unsecured loan as the lender has the collateral as a backup.\u00a0<\/b><\/p>

Mortgage, auto loans, and secured credit cards are a few of the most commonly used secured loans.<\/b><\/p>

Unsecured Loans<\/u>:<\/span> <\/b><\/p>

These are loans with no collateral as a backup. These types of loans are usually provided to the borrower based on their credit standings (credit history and credit scores).\u00a0<\/b><\/p>

Since there is no collateral backup in such a loan, the interest rates charged by the banks or the lenders are usually higher compared to the secured loans as the lender has a higher risk in case you are unable to repay.\u00a0<\/b><\/p>

Credit cards, personal loans, and student loans are a few of the most commonly used unsecured loans.\u00a0<\/b><\/p>

If the customer cannot pay the unsecured loans, the lender has the right to sue you, which might also negatively impact your credit, resulting in a denial of future loan requirements.<\/b><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t