Unsecured Personal Loans Vs Secured Personal Loans

Posted July 17th, 2010.

You may be curious as to the differences between Unsecured Personal Loans and secured personal loans.  The difference, as you can tell from the name, is the security of the loan.  This does not mean the security of your personal information!  A secured loan has something that will guarantee its repayment, on penalty of a bank reposession.  Examples of secured loans are car loans and home mortgage loans.  In contrast, unsecured personal loans have nothing to secure the loan, making them a bit more of a risk for the lending bank to provide for the public.  Both types of loans affect your credit rating.