A simple search on loans will throw hundreds of thousands of results detailing the various types of loans. Some advocate unsecured loans, while others swear by secured loans. Very often consumers get confused between the two terms and often write to us asking for an explanation on the difference between secured and unsecured loans.
Secured VS Unsecured Loans
At a very elementary level, secured loans will generally be offered to individuals in lieu of some form of collateral which will be pledged to hedge against the risk associated with the “riskiness” associated with the individual or business. On the other hand, an unsecured loan is offered sans any form of collateral or security, either because the individual’s credit history is stellar or the bank does not find the individual or business to be “too risky”.
When are Secured Loans a Better Option?
If your credit has tanked recently, a secured loan offers more hope — and a higher chance of approval — if you are in need of urgent cash. Generally, customers opt for secured loans under one of the following situations:
- Bad credit issues
- Large number of loan application denials
- New credit or no credit
- Rebuilding credit
Individuals who are rebuilding credit, prefer to take small amounts of secured personal loans to help bridge the gap and rebuild their credit history. Once the credit score reaches a higher number, banks and lending institutions automatically consider such individuals for short term unsecured loans. That essentially is the first difference as far as the comparison of difference between secured vs unsecured loans is concerned.
When are unsecured loans a better option?
Individuals with a higher credit rating or those who prefer to borrow without the hassles associated with security and collateral pledges prefer to opt for unsecured loans. Ideally, the following class of individuals would find unsecured loans to be a better option:
- No credit issues
- Stellar credit
- Established credit history
- Strong financial credentials
Now that we have explained the difference between secured and unsecured loans, why not consider applying for one at NationalLoans.com.
Whether you have a great credit history or are just starting out and are generally considered a bad credit individual, we have a variety of loan programs irrespective of whether your choice leans on either end of the debate of secured vs unsecured loans.
Hundreds of lenders cater to your loan needs
At NationalLoans.com, we have assembled a huge database of hundreds of lenders so you can decide on the lender you want to choose. With so many options, the chances of you obtaining favorable loan term and a low interest rate package are much higher. No matter what option you choose (secured or unsecured loans), you are going to emerge a winner when multiple lending institutions compete for your business.
Low interest rates, higher credit lines, lots of lenders — all in one place at NationaLoans.com.
Seriously, it takes just thirty seconds to complete our online loan application and the rest is a breeze. As soon as you submit your request, hundreds of lenders will start competing for your business. Low interest rates, higher credit lines, and solid support form a potent triad in your search for secured vs unsecured loans.