| A secured loan is secured against an asset that you own. This will be your car or other vehicle that can be registered as security against the loan. When you take out a secured loan you are using this asset as collateral should you fail to meet your loan repayments. For example, should you default on your secured loan repayments, as part of the agreement your loan provider may take possession of the security you offered before signing the contract. Due to these loans being secured against assets, consumers can often borrow more at a lower interest rate in comparison to an unsecured loan. An unsecured loan is simply a personal loan that is not secured against an asset. Unsecured loans are usually offered at lower borrowing amounts and with a higher interest rate. |
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